DIAC making regional sponsorship invalid

I applied for subclass 487 on the basis of sponsorship by a regional area, in June 2009. In my application I submitted the sponsorship approval letter from the regional sponsoring body. I sent TRN to the sponsoring body soon after lodging the visa application but   regional sponsoring body didn't send my form 1100 to DIAC (they say they never received my TRN).

Now when I followed up and the regional body sent the form 1100 to DIAC (the visa application is still under process and a case officer hasn't been allocated). The DIAC has replied to the regional sponsoring body that as my nominated occupation is not on the current SMP list for that area thus sponsorship in made invalid.

What can be done?

regards,

Gurpreet