My wife and I were booked on TLV-LHR-AUS today. Last evening I got a notice that both of our flights were cancelled and we were rebooked on TLV-LHR-AUS on Wednesday. The problem was with the LHR-AUS flight, which BA cancelled due to weather in the US. TLV-LHR departed on time a short while ago. I'm a bit irritated that they cancelled both flights even though it was the onward connection that was cancelled. If we could have gotten to LHR today there would have been more options to get back to AUS, possibly later today but likely tomorrow. However, when I finally reached BA last evening we couldn't get our seats back. The flight was sold out.

Tomorrow's TLV-LHR is J1, but there are two of us, and tomorrow's LHR-AUS is completely sold out.

The trip was originally ticketed through AA in business class.

The Wednesday arrival in AUS is already creating problems for us. I would prefer to at least get to LHR by tomorrow so there is no risk of a misconnect there on Wednesday. Neither BA nor AA will rebook on El Al, or any other carrier, although there were J seats available to LHR tomorrow morning. So late last night I booked two fully refundable J seats on El Al from TLV to LHR for tomorrow, just to have that as an option.

Questions...
Will AA/BA rework my ticket to drop the TLV-LHR segment and leave me with just the LHR-AUS segment on Wednesday, without a change in fare? If so, I would stick with my LY option and just eat the extra airfare.
Since this is all weather related I assume there is no UK261 compensation due, but will BA's duty of care cover an extra two nights of hotel and two days of meals in Israel, assuming we keep the original rebooking? Will it cover anything else?
Are there any options to better our situation that I haven't thought of?