Selt, ranked 43rd in the world, had to win two qualifying matches to get to the tournament at the Bendigo Stadium in Bendigo, Victoria.
But he beat current world champion John Higgins on Tuesday and today claimed a 5-1 victory in the last 16 over seven-time world champion Stephen Hendry.
“There was a bit of pressure for me to win as I was playing Stephen Hendry and he’s the greatest winner of all time – he’s like a machine,” said Selt.
“After beating John I felt amazing but I was brought down to Earth with that performance.
“I didn’t feel like I did yesterday and Stephen didn’t play well at all. I only had five hours sleep last night so that might not have helped but if Stephen had played well he would’ve won.”
Ken Doherty bounced back from World Cup disappointment to record his finest victory for more than a season.
Doherty was in the two-man Irish team that struggled in Bangkok, only scraping their way through the group after a defeat against Pakistan before being knocked out in the quarter-finals.
But Doherty, ranked 28th in the world, defeated Stephen Maguire 5-2 in the first round.
“I played pretty well and I’m delighted to have beaten such a tough opponent,” said Doherty. “It’s been such a long time since I’ve beaten someone of Stephen’s standard, a top eight player.
“I can’t remember when it would’ve been but it wasn’t last season. I beat Neil Robertson to get to the quarter-finals in the Shanghai Masters the year before last and beat Mark Selby in the Grand Prix.”
World number one Mark Williams also advanced into the last 16 but was furious with his performance in his 5-2 win over Barry Pinches, the world number 41.
“It was really tough and the way I played was just awful, appalling and I don’t know why it was so bad,” said Williams.
“I was unhappy with every part of it. It’s about getting through but you don’t want to play like that. Sometimes you get a sense of making 30s but there was nothing today.
“We both dragged each other down; I was missing everything and he was missing everything.”
In the final match of the third day, Stuart Bingham gained revenge on Ding Junhui in a high-quality encounter.
Bingham missed out on a place in the top 16 as he let a 12-9 lead slip before losing 13-12 against Ding in the second round of the World Championships in April.
“It took me about five days to get over that defeat,” said Bingham. “After I beat Michael Holt to qualify I went on my Twitter and Facebook pages and said revenge will be sweet – and it tastes nice.”
Mark Selby, the world number three, completed a fantastic fightback in his match with Joe Perry.
Selby was 3-0 behind and 68-13 down in the fourth before he stole that frame on the black on his way to a 5-3 victory.
“Joe was brilliant in the first three and a half frames and I should’ve gone 4-0 down. If I had then I would’ve been out of the tournament,” said Selby.
“But I managed to grind myself back into it. The interval works both ways and for Joe it came at the wrong time but for me it came at the right time.
“I didn’t do that much wrong in the first four frames and if had been 4-0 then I couldn’t have had any complaints as Joe was the better player. It could’ve been 5-0.
“The fourth frame was a big one for me and the match changed after the interval.”
Liang Wenbo narrowly missed out on a 147 break but still did enough to complete a memorable 5-4 victory over Matthew Stevens.
Liang successfully potted 15 reds and 15 blacks but ran out of position potting the last black and he missed the yellow.
2011 AUSTRALIAN SNOOKER GOLDFIELDS OPEN
DAY THREE RESULTS
Mark Williams 5-2 Barry Pinches, Stephen Maguire 2-5 Ken Doherty, Mark Selby 5-3 Joe Perry, Matthew Stevens 4-5 Liang Wenbo, Ding Junhui 1-5 Stuart Bingham