Why don't you ask that attorney to now lead you out of this predicament?
The information contained in this answer is provided for informational purposes only, and should not be construed as legal advice on any subject matter,not should it be viewed as establishing an attorney client relationship of any kind.
Ravi- if you are now in the US, your employer can file another H1 for you and ask for a I-94 as a transfer case. It should go through. Once it is approved you can have the employer withdraw the previous petition.
The advice suggested here is for general information only and not to be construed as legal advice.
You should take the RFE to you our employer's attorney and discussed the option of filing a change of status in United States based on the previously approved H1B or possibly refiling for H1B at this time.
Attorney Robert Brown's (former INS Director, 1972-99) reply to your question is general in nature, and does not constitute legal advice as all facts are known to him. For specific advice or representation you should retain an attorney experienced in immigration law. Mr. Brown's reply on AVVO does not create an attorney/client relationship not constitute legal advice.