have a look at the black line that someone else has put on the pic which probably takes into account the angle better than mine - still onside. If you cant see the WHITE ball in Genias hands with the action of passing, then there is no hope. Either Genia has his hands on the ball ie the ball is out or he is handling in the ruck ie penalty to Lions, he doesnt have his hands on the ball and is dummying which became illegal back in the mid 90s and penalty to Lions, or he actually has his hands on the ball (which he does) and is the motion of passing (which he is) and would have had his hands on the ball for a split second previously to pick the ball up (which he did) and Lydiate is STILL behind the line. Therefore, onside, wrong decision. Even the most golden eyed wallaby supporter can see that, and I am an Aussie!!!
I'd rather move on look forward to the next test. The Lions were poor in Melbourne, and had to play against 16 men in Bris Vegas (http://youtu.be/oK7nEzVX4T8) - lets hope the ref on Sat applies the rules!!!
You are clutching at straws if one dubious penalty is your reasoning for the referee having a terrible game.
Live and to the naked eye it appeared as though Lydiate was well offside because he was so far in front of the rest of the defensive line. When the entire Lions tour has featured a defensive line that moves up incredibly fast this is going to be cause for any referee to think that the player was offside.