I think if Madara didn't have the Jyuubi in him right now he would would dead for sure. Power wise I think Gai has proven he has equalled or surpassed Hashirama, if only for one battle and at the cost of death.

I agree that Madara should have like a couple of broken limbs at least, not laughing like a clown at Gai. Obviously Gai isn't going to beat him, but if this is the kind of response Madara gives then Gai's life seems wasted. He should then also get some kind of get out of jail card like Tsunade doing something bloody useful after doing jack all during the battle and saving Gai's life.

How Lee's current status doesn't make him an elite Jounin, let alone a normal Jounin, I don't know. Him staying as a Chunnin is laughable when you consider Kurenai was a Jonin who Itachi dispatched without even breaking a sweat. He probably needs more battle experience and tactical study before he would be considered lethal in the Kage class, but Lee is standing shoulder to shoulder with Gaara, Kakashi and Yondaime. That says something.