This is one of those situations where the ATO looks for the 'intention' behind it. There is no fixed time period, and no set price variation, but rather a 'wash' would be when shares are repurchased soon after tax-loss selling, and at a similar price to the disposal price.
So, if the price continues to plummet and you buy them back 2 months later substantially cheaper, you might be ok.
The ATO are looking for sales and repurchases where the sole intention is to get a tax break (personally I'm inclined to agree with you that the restriction is irksome - after all, there's no guarantee you'll be able to buy the shares back at the same or lower price).
But I think you need to be able to show that the selling was to avoid further capital losses, or some other valid reason, rather than avoid tax.
