Australia team-mate Michael Clarke also withdrew from this year's big-money tournament, citing similar reasons as Ponting.
Watson will remain in Ipswich for two days before rejoining the Australia team before Friday's second match in Hobart.
Hussey was part of the Australia team that failed to get past the group stage in the ICC World Twenty20.
Ponting's team now has to revive their fortunes to avoid the ignominy of being the first Australia team to be whitewashed at home.
Former Liverpool star Harry Kewell, a team-mate of Neill's in the Australia team, and ex-Aston Villa striker Milan Baros are already playing at the Ali Sami Yen Stadium.
But Hughes could still find his place under threat while Johnson is another who will nervously await the announcement of the Australia team to face England at Edgbaston for the third Test.
The New South Wales paceman, who has described his current elbow injury as the most painful of his career, says he will meet Australia team bosses and captain Ricky Ponting to discuss his options.
"He will be unavailable for the two remaining ODI games against England and his return to cricket will be determined by his progress over the next week, " said Australia team physiotherapist Alex Kountouris of Marsh.
He has been a regular member of the Australia A team, but has yet to play Test or one-day international cricket.
BBC: SPORT | Cricket | Counties | Leicestershire | Hodge turns down new deal
Smith, who also played rugby league for Balmain Tigers, started his coaching career at Eastern Suburbs and had spells with the Australia sevens team, the ACT Brumbies and Bath before joining London Irish.
If he was out of Australia's team then that would be a different kettle of fish.
Only Renault said it definitely intends to use Kers in Australia - despite team boss Flavio Briatore branding it "terrible".
The 16-team tournament continues on Monday, as Group C kicks off with outsiders India playing Asia's top-ranked team Australia and then two-time champions South Korea taking on Bahrain.
CNN: Syria shock Saudi Arabia at Asian Cup; Japan snatch draw
Tim Paine will be behind the stumps for Australia, but team physiotherapist Alex Kountouris said Haddin, who missed the Pakistan series with the injury, is making good progress with his rehabilitation.
That was hardly a recipe for the sort of confidence some Welsh fans and pundits were displaying ahead of the clash with Australia, a team honour-bound by national tradition to do all in their power to redeem themselves in the eyes of a hyper-critical public and media.
England's senior team take on Australia in the second Test on Saturday, and although this was only the second-string team, he was clearly glad to have finally notched a win after a draw and defeat in the first two matches of the tour.
The Lions team flies to Australia on Sunday for a five-week tour that includes three Test matches against the Australian national team, which is ranked third in the world after New Zealand and South Africa.
Sir Donald prospered as a stockbroker and for many years helped to select Australia's cricket team.
England's chairman of selectors David Graveney has, meanwhile, urged supporters to get behind the team in Australia.
BBC: There is no history of English fans causing trouble abroad
If you let a team like Australia get momentum and quick ball, then you are going to struggle.
Australia's senior team will get their first taste of the shortened format in June, when they tour England.
Fiji captain Wes Naiqama, who plays for Newcastle Knights in Australia, said his team were not interested in money.
"With his history of back problems, we felt he should go back to Australia, " said team physio Alex Kontouri.
South Australian Cosgrove played three times for the Australia one-day team in 2006, but he has had weight and fitness problems.
Meanwhile, Australia's cricket team says it has held talks with Indian authorities about its players' safety in the wake of the bombings.
Meanwhile, Australia's cricket team says it has held talks about its players' safety with Indian authorities in the wake of the deadly twin bombings.
"Last thing we want to do is underestimate any of their players, Australia is a strong team and this time will be no different, " he said.
McLaren team principal Martin Whitmarsh said in Australia that focusing on winning last year's championship had cost his team some competitiveness at the start of this season.
Australia have used the same team in all four of home Tests this summer.
BBC: SPORT | Cricket | Other International | Australia add MacGill and Watson
应用推荐