If Australia's bowling was going to be rubbish without Warne and McGrath, of course it would be the end of Australia's dominance, but I don't really think it will be. McGrath hasn't been leading the attack in test cricket for a few series now, and if he does retire (which hasn't been confirmed) he will certainly do so with the understanding that his body isn't up to the strain of international cricket any more. He's still obviously a great bowler who is probably the hardest in the world to face on a helpful wicket and capable of running through any team, but with some strong support available I don't see his retirement as crippling, any more than say losing Steve Waugh was.
Warne is obviously a different story, and Australia will have to learn to get by without him. It will see a drop in performance, and possibly more lost and drawn tests, but Australia will still be the best team in the world by a fairly comfortable margin, IMO. With England already having lost here, it's hard to see who is going to come to Australia and win a series any time in the next four years, and that's a fair while in international cricket.
The 2009 Ashes and the subcontinent tours in the intervening period will be extremely challenging, though.