Hi All,
I am an Australian citizen currently on an Italian Type D working holiday visa. I am desperately trying to obtain an extension or another visa so that I can stay for one more year in Italy. Can anybody help?!

Just guessing, but maybe the Italian Embassy? Probably a much better bet than a bunch of strangers on a website.

I tried that but the woman I spoke to was rather unhelpful. Am going to try at the consulate in person but I thought I would 'pick the collective brain' and see if anyone else out there had had a similar experience...

I THINK the short answer to this is that you can't, and need to go home and apply for another kind of visa - which will be pretty tricky to get.

But the Thorntree (Western Europe) site will have far more people who are familiar with the ins and outs of WHVs.

Your choice is quite limited.
You can stay as per Schengen rule for 3 months in any 6, but can't work. You don't need a visa for this.
You can enrol as a full-time student. You can apply to work in spare time and holidays, subject to local permission.
To work for an employer full time, you need sponsorship for work permit, which is very hard to get and the application process is drawn out and expensive (for your potential boss). Unless you have unique skills and experience in demand in Italy, your chances are slim.
Internal transfer with an Australian firm with presence in Italy - but as someone on WHV I suppose you don't qualify; ditto with Australian diplomatic service.
Marry an Italian or another EU/EEA or Swiss national.
Research your ancestry to see if you may be eligible for Italian or Irish passport - even then it's a long process taking on average one to two years.