-I think you have a change to win the appeal becasue the TARP-subject employer restrictions apply only to "New" H1 employee, not the old h1 employee who extends his/her h1 status.
See: http://www.murthy.com/news/n_tarpcl.html
Also, you may change your status to O1 if your qualification is good and if you can not get h1 extension. TARP does not apply to O1 status.