What's the impact of net-splits on block generation... over a long period of time?
If 25% of the network hashpower were to be isolated (Australia had no Internet for example), what is the effect on block generation?


Aussie transactions take 4x longer to confirm, actually. Everybody else's transactions take 33% longer (1.0/0.75)


  What would happen to the isolated Australian chain if it reconnects to the main chain? (w.r.t. the difficulty adjustment)


It's instantly blown away, and the main chain is downloaded to all of the Aussie bitcoin clients.


  Suppose a different percent of the network were to become isolated. What combination of %isolated, duration, and network hashrate would cause a 4x difficulty to be reached?


Suppose that 3/4 of miners suddenly have no internet access. For 8 weeks. That's when you'd see the difficulty drop to 1/4 of its previous value.