On another crazy day of Ashes cricket, 16 wickets fell in total.
Despite the earlier bloodshed with the bat, lion-hearted Peter Siddle (3-4) delivered a fighting, against-the-odds performance for Australia in the final session to leave England 3-31 in their second innings at stumps.
But so much more is needed to save Australia from Ashes crisis, with England enjoying a commanding 264-run lead.
The highest successful chase at Lord's was 344 runs by West Indies against England in 1984.
Joe Root is 18 not out and nightwatchman Tim Bresnan yet to score.
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Triggered by another butchering of the decision review process, Australia lost 10 wickets for 86 runs in 41 overs earlier friday. They were all out for 128 in reply to England's first innings of 361.
The Ashton Agar effect was over and Darren Lehmann's honeymoon period officially ended.
It will go down as one of Australia's most catastrophic batting performances, even from a team that, in recent times, has been no stranger to collapses.
Terrible use of DRS, compounded by embarrassing shot selection sent Australia plummeting from 0-42 in the over before lunch, to be all out midway through the final session.
Graeme Swann finished with 5-44, but the Australians only had themselves to blame.
Just two batsmen passed 20 and seven fell for 10 or less.
Australia's first innings lasted three and a half hours - the same amount of time it took Jonny Bairstow to make 67 for England in their first dig.
The batting failure was a huge slap in the face for the bowlers, in particular Ryan Harris.
He completed a brilliant five-wicket haul in the morning, but the injury-prone quick was being asked to roll through the overs again in the afternoon.
Watson challenged when he shouldn't have, Rogers (15) walked when he should have challenged, and Phil Hughes was either just as silly or an unlucky victim of DRS confusion.
By wasting his lbw review when plumb, Watson directly impacted on Rogers' decision to not challenge his going down leg - with Australia learning nothing from their DRS failures at Trent Bridge.
Usman Khawaja played a poor shot in his Test return, skying Swann to mid-on, and there was the elementary run-out of Agar.
The comedy capers continued when back into the field - Brad Haddin letting a regulation keeper's catch from Joe Root fly through to the boundary off Watson's bowling in the fourth over.
Siddle struck with three wickets in four overs to get rid of Alastair Cook, Jonathan Trott and Kevin Pietersen, but Australia will need a miracle to avoid going 2-0 down in the series, with the pitch to continue breaking up as the match goes on.