I know. Its ridiculus. The thing is, you could call again tomorrow, talk to someone else, and they would give you a completely different answer. I had the same problem doing the reverse with the FAA.
How confident are you about no one other than the regionals looking at you without the 7 ATPL exams done, just with the converted FAA ATP-CASA ATPL? Have you heard it from someone in a similar position to us that has been knocked back?
There's also no way to do the ATPL exams outside Oz is there? Geez, they dont make things easy, do they!?!