After the Nazis snatch the Ark out of Indy's hands, they throw him and Marion into the Well of Souls to die. Indy quickly finds a way out, only to encounter various fights against the Nazis. Once he sees that the Ark is being taken away and Marion has been taken prisoner, Indy infiltrates a Nazi base on an isolated island near Greece and threatens to blow the Ark up with a Bazooka. However, his nemesis Belloq urges him to watch what's inside the Ark before he does. Indy submits and is taken prisoner, along with Marion. While they are cuffed to a pole, Belloq, interrogator Toht, and Colonel Dietrich open the Ark. Realising that one cannot watch the power of God, Indy orders Marion to keep her eyes shut. Spirits come out of the Ark, beautiful as they can be-only to turn into demons on Earth. The Nazis all scream with fear as the power of God is unleashed upon every Nazi around. Toht's face melts; Dietrich's face is disfigured, and Belloq's head explodes. All of the corpses fly to the sky. Then the Ark is closed. Marion and Indy survive the event due to Indy's advice. In America, the Ark is taken into a warehouse, another box in the middle of nowhere.
Grappa
Answer: The scene you describe was indeed filmed. It was cut out of the US release of the film although I cannot speak for the Australian version. The scene also appears in the Marvel Comics adaptation. http://www.theraider.net/films/raiders/deleted_scenes.php has a list of this and the other deleted scenes.
Phil C.