Marsh was ruled out of Wednesday night's 67-run win over Ireland in Colombo after copping a blow to the groin while receiving throwdowns at training on Sunday.
Scans revealed internal testicular bleeding, with no timeline set on Marsh's return as Steve Smith rushed to Sri Lanka as a standby.
If Marsh is ruled out for the rest of the tournament, Australia would parachute Smith into the squad.
Alternatively, if Australia want to take the gamble on both Marsh's fitness and playing one bowler short, Smith could come into the 15-man squad for Josh Hazlewood, who has already been ruled out with an Achilles tendon issue but is yet to be replaced.
Australia are back in action on Friday when they take on Zimbabwe in Colombo, before they round out their group stage with games against Sri Lanka next Monday and Oman a week on Friday.
Marsh is a vital cog in Australia's bid to win the T20 World Cup, but even if he is ruled out, the 2021 champions will be safe in the knowledge Smith has been in hot form of late.
Smith averaged 59.8 for the Sydney Sixers at the back-end of the BBL campaign, and he is champing at the bit to play his first T20 international since February, 2024.
Australia only had 12 fit players to choose from for their match against Ireland, but master blaster Tim David (hamstring) is expected to return against Zimbabwe.
Whether Marsh will be able to join him remains to be seen.
"It would be nice to get a couple more fit over the next few days. Trending that way," stand-in skipper Travis Head said after beating Ireland.
"You're not going to win a World Cup right now, but it would be nice to get the boys purring by the business end of it."
Ireland made just 115 on a tricky batting wicket in reply to Australia's 6-182, with paceman Nathan Ellis (4-12 off 3.5 overs) and spinner Adam Zampa (4-23) starring.
The form of Ellis was particularly pleasing given Australia are without their big three pace aces Hazlewood, Pat Cummins (back) and Mitchell Starc, who retired from T20Is last year.
"We've said it a lot now leading into this, we actually haven't seen a lot of the big boys in the bilateral series in the last 18 months," Ellis said.
"We've had the likes of (Ben) Dwarshuis, (Xavier) Bartlett, Sean Abbott, and even some of the younger guys in the recent series against Pakistan.
"We've played together a fair bit now. The planning and the processes in the last 18 months leading into this has put us in good stead to go deep hopefully without the likes of the big boys."
