The 27-year-old Blake has never gone beyond the quarterfinals in 20 majors, but came into the season's first Grand Slam tournament confident of improving on that after defending his title at the Sydney International.
Instead, it was Gonzalez advancing to the quarterfinals 7-5, 6-4, 7-6 (4) for the first time in Melbourne. He got himself out of trouble with aces when he had to, and regularly ripped forehand winners to keep Blake on the baseline.
Gonzalez got better as the match wore on. He had 11 of his 18 aces in the final set, along with 24 of his 52 winners and only five unforced errors.
The 26-year-old Chilean had a little trouble closing, wasting two match points on Blake's serve and then getting broken himself when serving for the match.
But he dominated the tiebreaker, getting two mini breaks before closing with an ace.
Gonzalez will have to get past either No. 2 Rafael Nadal or Andy Murray to reach his first semifinal at a major.
"That's the next step. It's only one match away," he said. "I'm ready. I know that I have a really tough match on the next round, too. But I trust in my game the way that I'm playing."
Blake reached a career-high No. 4 by making the final at the season-ending Masters Cup last November and had been confident of taking the extra step in a major.
He said he thinks he'll have more opportunities.
"I hope I haven't hit that plateau yet. I know every player hits a plateau, they can't get any better, can't add anything," Blake said. "I hope I still can.
"Conventional wisdom says at 27 you can't add anything. I haven't done my career extremely conventionally. Nothing about it has been by the book."
Tommy Haas ended eighth-seeded David Nalbandian's endurance run, advancing to the quarterfinals with a 4-6, 6-3, 6-2, 6-3 win.
Nalbandian twice rallied from two sets down and saved match points in earlier rounds, but ran out of gas after taking the opening set against the 12th-ranked Haas, sending a backhand wide on match points.
"I've seen what he can do in the past couple of weeks," Haas said. "So I'm really happy with the way I played today. ... it was really, really good."
On the women's side, Martina Hingis and Kim Clijsters set up their second straight Australian Open quarterfinal showdown.
Hingis, the Swiss star who swept the 1997-99 titles and reached the finals the next three years before quitting the tour because of nagging foot and ankle problems, weathered an early challenge from China's Li Na before winning 4-6, 6-3, 6-0.
Clijsters, a 23-year-old Belgian in her final season on the tour, beat No. 15 Daniela Hantuchova 6-1, 7-5. Last year in the quarterfinals, Clijsters ended Hingis' first run at a major after three seasons in retirement, winning 6-3, 2-6, 6-4.
"It's always a pleasure to play her again here," Clijsters said. "She's just a great champion."
The pair are friends and are tied 4-4 in head-to-heads, although Clijsters has won their three matches since Hingis returned to the tour.
"To me that doesn't promise anything you have to go out there and fight for every point," she said. "It's a totally different match. It is the quarterfinal. It's at the Australian Open again."
Hingis has reached the quarterfinals in her last nine trips to Melbourne Park.
Clijsters was up 6-1, 3-0 when Hantuchova rallied and got back on serve in the second. Clijsters wasted two match points in the 10th game and had to break serve to finish off the match in 1 hour, 19 minutes. She lost only nine games in three previous matches.
Hingis, coming off three two-set victories, was taken aback by heavy pressure from Li's strong ground strokes in the first set, reports AP.
"She came out on fire, I've never played her before, I knew it was going to be a difficult match," Hingis said. "I knew I had to come up with the best ... and after the first set I started playing better."
Hingis looked shocked as she sat down after losing the first set. But she pulled herself together and started mixing up her game, drawing Li to the net with deft drop shots, then sending up lobs that the Chinese player often whacked way long.
Li's unforced errors reached 69, while Hingis limited hers to eight.