It might not be settled whether Proto-Germanic *au was monophthongized before developing to Old English *ea. A development to a monophthong (as you suggest) has been proposed by Raymond Page ("The Old English Rune Ear, Medium Ævum Vol 30, No 2. (1961), 65–79, my access through JSTOR), who I found discussed in "Palatalization of Velars:A Major Link of Old English and Old Frisian", by Stephen Laker. Laker points out that this could not have been the same monophthong as the one that developed from Proto-Germanic *ai.
Laker however also mentions three alternative proposals in the section "4.3 Palatalization in Old English before +ea, (< Gmc *au)", (pages 177-180).
per Karl Luick and Kurt Goblirsch : Proto-Germanic *au > Anglo-Frisian *æa, monophthongization Anglo-Frisian *æa > *ā in Pre-Old Frisian.
per Robert Fulk : Proto-Germanic *au > Anglo-Frisian *æu, Pre-Old Frisian reversal of this change *æu > *au followed by *au > *ā
*au > æa as a relatively late sound change in Old English after the split from Frisian
A side note that has some relevance. As far as I know, there is not even total consensus on the exact phonetic form of Old English ēa itself. It seems generally agreed that it started with the same quality as æ and ǣ, generally taken to be more or less IPA [æ]. The quality of the second element and the quantitative structure of the diphthong are however disputed. Many authors indicate the second element is [ɑ], like a; others instead describe it as [ə] (Donka Minkova, A Historical Phonology of English, 2014, §6.5.3 Diphthongs and Diphthongoids).
The ēa from the original diphthong *au merged in Old English with ēa from the breaking of long ǣ, but is known to be distinct from the homographic ea that developed from breaking of short æ. Some authors treat these as diphthongs that are respectively long and short (hence, they are commonly distinguished by writing the first as ēa and the second as ea). Other authors argue that the short sound should not be categorized as a genuine diphthong; it is possible to treat the short sound as some kind of allophone of /a/ (Old English short a, ea, and æ are mostly in complementary distribution), an analysis that makes it unambiguous to transcribe ēa without a length mark as [æɑ] or [æə].
We can broadly say that the Old English form seems to show fronting and raising of the initial element, and lowering and unrounding of the second element, but the ordering of these processes and exactly how they occurred seems difficult to determine.
