Pretty crappy situation really. The problem for the "senior player" mafia is that none of them are actually any good at the moment, so regardless of the rights and wrongs, I'd be reluctant to sack the coach and India's best player just to appease them. I seriously doubt any of Tendulkar, Harbi or especially Ganguly are going to, from this point forward, make the contribution to India's performances that Dravid will.
The best solution IMO would be for Chappell to be "persuaded" to resign - as opposed to being sacked - and this opportunity be taken to cull some of the troublesome members of the squad. Come out and say that this is a clean out aimed at making the Indian team the best in the world by the 2011 World Cup and explain that it might mean some short term pain but its with a definite plan towards that goal. Bring in the players that you think have the potential to make India #1 by 2011 now, and have the willingness to do the work required to achieve that, and be prepared to stick with them as they grow into the roles. Australia had to do much the same in the mid-80s by sticking kids like Steve Waugh, Dean Jones, and Boony in - picked as much for their perceived character/mental toughness as their cricketing talent. They got hammered for a couple of years, but grew into the nucleus of the team that won a world cup, regained the Ashes, and went a long way down the road of becoming the best team in the world. India has the talent there - the problem seems to me to be getting them the window of opportunity to make it happen.
I think the overwhelming majority of historical cases would show that short-term fixes (ie same team with new coach) or the revivals of the recent past (ie recalling older players who's best days are behind them) doesn't produce sustained success.