The answer to dealing with Italy as Austria is simply to set up for an AR or AT.
Take a look at this recent-ish game with some pretty high up there gunboat players. Italy attacked me straight from the get go, so I had no choice but to just wait things out. Eventually the board sorts itself in a way that helps Austria if they are being cornered from all sides.
http://webdiplomacy.net/board.php?
gameID=186462The most common thing that helps Austria is a Western Triple. France beelines to Italy, while Germany and England head into Russia, buying Austria some time to recover. But most games eventually end up allowing Austria to live on, as long as it survives long enough. This game, it happened to be Germany doing a land blitz on Russia. once that happened, I was able to start rebuilding. Apparently the anti-italy Turkey wasn't enough for Italy to want to stop attacking me, so I decided to pair with Turkey to taking Italy out. By that Time, France has already been growing to the point of being a threat so would finished the job after stalemating.