Judge Holden- looks like that would work great. If you lose the bubble ring and just run a straight air line from a pump you would probably get even better flow, and it would still produce bubbles of course. As long as aquarium water is being drawn through the pores of the sponge, the sponge will harbor beneficial bacteria.
Make sure water can flow through the bottom of the log before it hits the sponge.
Make sure water can flow through the bottom of the log before it hits the sponge.