The Kookaburras' path to Olympic gold runs through European hockey powerhouses the Netherlands and Belgium after a frustrating 3-2 loss to India in Paris.
Australia's men's hockey team, silver medallists three years ago in Tokyo, had 19 shots on goal and five penalty corners in a wide-open Friday afternoon affair.
But they were left scratching their heads after blowing chances time and again, including in the final 10 seconds when three rushed shots bounced around the circle and off Indian goalkeeper Sreejesh Parattu as the clock expired.
In Australian flagbearer Eddie Ockenden's 450th Test, it was India's fourth defeat of Australia in 12 Games clashes - but the first since 1972.
And it was enough to push India ahead of Colin Batch's side into second place, Australia finishing third and drawing the second-seeded Dutch on Sunday in a replay of the 2004 gold medal game won by the Kookaburras.
"That was a pretty tough match," Ockenden said.
"Maybe we were not quite there. but there were a lot of good things. Every opposition's tough here.
"We're probably not at our very best but a few things (go) our way and we probably could have had a result there."
India, who won bronze in Tokyo, will play Great Britain while Belgium meet Spain and Argentina will battle Germany for the remaining semi-final spot.
The winner of Belgium - they beat the Kookaburras in a shootout to win Tokyo gold - and Spain will face the victor of Australia's quarter-final.
"In the quarter-finals, we always know we are going to have tough games, it doesn't matter where you finish," Ockenden said.
Indian will be powered by star Harmanpreet Singh, who scored a trademark drag flick from his first penalty corner chance then slotted a penalty stroke.
Australia should have scored first, the fit-again Jake Whetton threatening early and Tim Brand with multiple chances as they found precious space in the circle.
Eventually the goal came from a penalty corner, Aran Zalewski recovering from his botched injection and the ball eventually finding Tom Craig on the far post.
Blake Govers' penalty stroke made it 3-2, after India had a fourth goal denied on review, and the Aussies then came within a whisker of a third that would have been enough to keep them in second and secure a final-eight clash with the British.
