That Aussie side didn;t lose to SL in SL, it was a youngish side without Gillespie & Waugh after they collided in the first(?) test, back in 1999.
Again you;re exaggerating, their rise coincided with fall of WI, SA & to a lesser extent Pak. Outside of McWarne tell me any other bowler in that squad better than Donald, Pollock, Walsh, Ambrose, Wasim or Waqar?
This was similar to the rise of WI in the 70's with a fall in fortunes of Aus & SA being banned. Of course it's not their fault that other teams were rebuilding, but when you say that Aus could make 2 top teams & still beat every other team out there, you're going against logic & history!
I think, more than anything, that AUS side was complete. It had every elements of a cricket team to overcome tricky situations. I put it this way - take out the top 2, Aussies had Gillespee, McGill, Lee, Clarke, Kasprowich; do the same for other teams; you'll understand.
Also, in batting, their batting started from No. 7 - Gilly, Lee, Warne, Gillespe. This is after the top 6 has tired down the bowling for say 302/6 at a RR of 4. On top of that, they had unbelievable catching unit - at least half a dozen match I can recall, Aussies won, simply because someone took couple of blinders to turn the game on it's head.
I think, you misunderstood my post - even the top AUS side lost a series in IND & SRL (injury I understand, but they didn't win the other 2 Tests to level the series. In fact, if I am not wrong, SRL was denied a Test win by rain in that series); but it doesn't count on head to head basis. You have to think it like this way - make an AUS A sometimes in 2002, and play 20 series home & away. I am almost certain, AUS & AUS A would have ended at definitely 1 & 2 or 3, over a 4 years period. Similarly, Lloyd's team lost the 1983 Final - that's one off; but if you count home, away & neutral ODI results for an hypothetical AUS A side between 2000 to 2004; again, top 2 Aussie sides could have ended in top 3.
I give you a counter argument, which you won't like - in 2002, IND lost a 7 match ODI series in NZ 6-1, or 5-2; then lost Test series 2-0; add to that PAK losing a home series to ZIM & IND losing one Test at Harare in 2000 or around. These are balancing factors for average to good team - just like Aussies lost 3-0 in SRL, & can lose 2-0 in BD, but they did make the series 2-1 in IND, who has won 3-0 in SRL & could have won all 3 by innings without getting all-out once.
It's a hypothetical scenario - you have to look at the bench strength of that AUS side and imagine their 2nd XI playing 50 Tests & 100 ODI in 4 years. In think, in 1997 WSC, AUS, AUS A & ENG participated - and AUS A made the final over Poms.