Couple of points. Regulation 261/2004 (in the context of QF) applies to flights from an EU airport. So it would apply to a LHR-SYD, LHR-MEL, LHR-HKG, LHR-SIN, LHR-BKK (if they still do that) but it would not apply to a flight (even a connecting flight) HKG-OZ, SIN-Oz, domestic flight etc. This is regardless of your 'base', it's the flight that was cancelled that matters.
In respect of flight cancellations (which appears to be the case with their grounding, although delays could have happened as well) there is a list of 'extraordinary circumstances' in which the regulation would not apply. Included in this list is 'strikes'. QF could (but I don't know if they are) argue that their shutdown was because of a strike.
I recall seeing in the press that QF had agreed to apply their 'normal rules' (See their Conditions of Carriage) for cancellations. I think the ACCC was putting pressure on them for at least this. Have you checked their web-site?