You're right, he shouldn't be in the side now if he isn't playing test cricket. But if I had to pick a side for the sole purpose of winning the next two matches it would read:
Shane Watson
Simon Katich (Brad Hodge)
Ricky Ponting
David Hussey
Michael Hussey
Brad Hodge (Steve Smith/Andrew McDonald)
Brad Haddin
Mitchell Johnson
Shane Warne (Ben Hilfenhaus)
Ryan Harris
Peter Siddle
The ones in brackets are if I'm not allowed to play the ones on the left. Katich injury would see me move Hodge to the opening slot, and slot in an all-rounder at 6. Depends whether we need a spinner or not. That's the best side in Australia, based on form and merit. Could probably beat any other.