I have just come from that direction and am currently in Jakarta.
The answer is that it is no problem to travel by bike in the region. You can island hop on regular ferries from Sumatra all the way down to Timor via Java, Bali, Lombok, Sumbawa and Flores. You then need to cross by land into Timor Leste, which was no big issue as customs and immigration were very helpful and friendly.
Once you get to Dili, you can arrange shipping to Darwin, Australia using Toll shipping. They do the trip regularly and while there is a bit of mucking around, it is definitely possible.
The bike I am riding is a Suzuki DRZ400E and it has been perfect for the job. You can do it on a smaller or larger bike but the midrange bike seems to be the ideal, especially given that you have to pay a large bond for the Carnet de Passage.
Good luck with your trip.
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