I tried your first alternative about twelve years ago and ended up following the edges of the timbered sections because the open plains were so awkard - wet, lumpy, tussocky, just very hard walking. The old maps do show a route crossing the plains, but even when I first went into that area it had pretty well disappeared.
An alternative is to go southish over Dairymans Plain and west to Dairymans Gap to meet the AAWT south of Dairymans Creek. I'm aware of a party that did this but have scant details. Is this route viable?
I dont have up-to-date info on this, but the track from the Mosquito Ck FT to Old Currango used to continue a bit SE and then mostly S, before turning back SE at 510473, to cross the Tantangara Reservoir. I walked that roughly 2km section and back and it was good going with the odd wet and muddy bit that you have to expect in that sort of terrain. From there it should be easy enough to continue SW and S on the open ground beside the reservoir until joining (or crossing) the Port Philip FT. The scrub bash from there to Dairymans would be a lot less pleasant, although you could follow the fire trail until it crosses open ground.
I never did Dam Trail but I have walked that stretch of the Murrumbidgee and a) there wasn't a bridge then and I wouldn't try crossing it without and b) it's not the easiest going beside the river. Nungar Creek valley was mostly easy walking, but I dont recall the fire trail going all the way north to the river ...