Foxsports has their Aussie Open predictions up. They put Rafa in the #4 sport and have this to say:
It’s not often that a world No. 1 who just came off the best season of his career with three substantial titles on different surfaces (the French Open on clay, Wimbledon on grass and Olympic gold on a hard court) isn’t considered a top 3 favorite, but Nadal re-injured his knee during the fall and was forced to miss Shanghai and the Davis Cup final. He returned last week in Qatar and suffered a straight-set loss to Gael Monfils in the quarterfinals, saying he was rusty but healthy.
Nadal is capable of winning a hard-court Grand Slam, but he’s had trouble adjusting his base when attempting to do so, as trying to play more offensively sometimes throws him off his primarily defensive game. But if he can enter the tournament feeling good about his heavy forehand and sporadic first serve, he’ll be in a good position to reach the semifinals again.
Last year, when he reached his first final four Down Under, a zoning Jo-Wilfried Tsonga blew him out. Don’t expect that to happen again, as Nadal is too prideful to allow another similar type of defeat. But unless the Spaniard takes control of matches early and often — which we have never seen from him in Australia or New York — he’ll likely walk away from Melbourne wondering whether he’ll ever raise a major trophy outside of Europe.