A surging Jason Day has exorcised some demons to raise hopes of another famous Australian Masters triumph.

From eight shots back entering the weekend, Day vaulted himself into contention for an elusive green jacket with a pressure-filled third-round display at Augusta National.

The former world No.1 rode a rollercoaster of emotions to chisel out a steely four-under-par 68 on a most extraordinary Masters moving day to find himself just one shot off the clubhouse lead.

As runaway halfway leader Rory McIlroy unravelled at Amen Corner, Day peeled off four consecutive back-nine birdies, then kept his cool in crisis to climb to eight under for the championship.

After finding the water on the 15th hole and taking bogey, Day's playing partner Cameron Young also showed incredible composure to rebound and close out a scintillating seven-under round of 65 to capture the outright lead at 11 under.

But it was Day's day for Australian fans.

The former runner-up found himself nine shots adrift of McIlroy after making bogey on the first hole before conjuring a spirited fightback.

He steadied with birdies on both front-nine par-5s to reach the turn at five under, then hit the go button with four more in a row from the 12th to the 15th holes.

'I was playing with Cam Young today, who is co-leading currently and I was just trying to keep up with him,' Day said.

'Obviously he had it going early and I had a pretty average start. I bogeyed the first hole with a three-putt, so you're just trying to steady the ship and just be patient. You know that opportunities will come.

'Statistically, I average around four to five birdies a round, so I just knew they were going to come. I just didn't know when they were going to come.'

But the 38-year-old rode his luck on No.15, his nemesis hole that has caused the former world No.1 so much hurt.

Going for broke in his bold bid to join 2013 champion Adam Scott as Australia's only Masters winners, Day's second shot into the par-5 seemed certain to disastrously dribble back into the water.

It didn't and he made birdie and was thanking the golfing gods.

'I was trying to hit this high draw and I mis-hit it, and it stayed out there. I just didn't think,' Day said.

'It's difficult because of where the wind, it's swirling everywhere and it's enough to manoeuvre the ball around enough to either pull a shot up short or make it go long. You just got to hit on the right gust.

'Obviously it's light and variable, that's the caddie's worst nightmare. Very fortunate it stayed up.'

Not even a bogey on the par-3 16th, when he dragged his tee shot into the bunker and was unable to get up and down, could derail the inspired former PGA Championship winner.

Staring down back-to-back dropped shots, Day fashioned an amazing scrambling par from the trees on 17 to get in the house safely in a tie for fifth after signing his scorecard.

One of only four players in history to finish runner-up at all four major championships, Day boasts four additional top 10s in his ongoing quest to claim a Masters jacket.

He tied for eighth last year.

Now he merely craves to be in the final-round mix, acutely aware of the old saying that 'the Masters doesn't start until the back nine on Sunday'.

'You just got to try and get yourself the opportunity on the back side. If you can get somewhere close to the lead on the back side, anything can happen,' Day said.

'The goal is to try and cut into the lead tomorrow through nine and, if I can do that, great.

'Then get myself somewhere near the lead on the back side and try and give myself opportunities.'