But, hurt by a critical magazine article in the lead-up to the Games which had said she was overweight and drank beer, Malleswari announced her retirement at her hour of glory, aged just 25.
After the double world champion gave birth to a son, Sarathchandra, in 2001, she became caught up in personal problems and with her father's death in 2002 it seemed her career had ended permanently.
But the 1.58-metre powerhouse will be back for the August Athens Games, aiming to become the first Indian to earn a second individual Olympic medal.
The 29-year-old Malleswari will return to the 69-kg class, confident that she is regaining her best form in the build-up to Athens, where she expects competition to be much tougher than Sydney.
"I'm enjoying my preparation for a second medal, I'm very hopeful," Malleswari told Reuters.
India have clinched four Olympic berths and Malleswari, with Kunjarani Devi, Sanamacha Chanu and Pratima Devi, is training in the Belarussian capital of Minsk.
Malleswari's medal in Sydney was only the third individual Olympic medal won by an Indian, after bronzes for bantamweight wrestler Khashaba Jadhav at the 1952 Games in Helsinki and Leander Paes in men's singles tennis in Atlanta in 1996.
HARD DECISION
The decision to take a second shot at Olympic glory was not easy for the winner of the Rajiv Gandhi Khel Ratna, India's highest sports award.
"Immediately after Sydney, I was confused whether to continue or not," Malleswari said.
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But her family and coach persuaded her to return in time for Athens and the lifter was also encouraged that her son, who turns three this month, needed less attention while she was away from home.
First, Malleswari, who tipped the scales at 89 kg after childbirth, had to get back into shape.
An overweight Malleswari hardly resembled an Olympic prospect even in January when she skipped the national championships.
A team mate playfully lifted her at the meeting, remarking: "Didi (elder sister) you are so heavy". Malleswari quipped back: "No, it's you who have become weaker."
Malleswari is aware that her 240-kg lift in Sydney may not fetch a medal in Greece.
"The competition in Athens will be very tough. Performances have improved a lot since the last Olympics," she said.
"It is no longer just the Chinese who are strong. Now Russia, Belarus, Bulgaria and others have also come up. In my category, there will be 11 or 12 medal contenders.
"But I'm happy with my lifting speed and training. I only have to increase my lifts gradually."
POOR FAMILY
Born into a poor family in the rural town of Srikakulam in Andhra Pradesh, Malleswari and her four sisters saw the sport of weightlifting as a passport to jobs and financial security.
India's women lifters such as Malleswari and the 37-year-old Kunjarani, a multiple medal winner in an international career lasting well over a decade, quickly overtook their male counterparts with their performances.
Although Malleswari took a short break in 1997 to marry fellow lifter Rajesh Tyagi, she returned to realise her dream in Sydney, where the women's event made its competitive debut.
Some observers feel Malleswari and Kunjarani are too old to succeed at the highest level.
But hopes have gone up after Russia's former world champion Leonid Taranenko, who guided Malleswari in Sydney, was brought back to coach the four-member Indian squad for Athens.
Taranenko feels the experience of the two lifters could prove crucial.
"I was 40 years old when I became European champion. Age is a big factor in sports, but not in weightlifting," he said.