L1 to H1-B consular conversion


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My current L1 Visa and I-94 expiry date is March 23, 2013. But the max out date for the L1 Visa is April 24, 2014, which means I can extend it one more time.

But my company wanted to convert my petition to H1 this year to may be give me an extra year of stay in the US.

If the H1 conversion gets approved, that would constitute a change of status, I did not want that to happen as my wife is working on a L2 EAD, so she would be no longer eligible to work. I told this and they said they will file the H1 conversion as a consular processing, so the change of status doesn't take effect until I go out of the country and come back with the H1 Visa stamped. This should happen before the H1 petition expiry date or the L1 Visa expiry date of March 23, 2013.

My company has filed for a H1 consular conversion in Premium processing.

My questions here are:

1) If the H1 petition gets rejected for whatever reason, can I continue to be on L1 until March 23, 2013 and can I extend L1 for one more time till max out period is reached?

2) My wife's company is also filing a H1 for her, if the H1 gets declined for some reason, can she continue working on the L2 Visa and EAD which is valid till March 23, 2013 again.

3) If the H1 gets approved, can we go to Canada (Vancouver/Ontario) for stamping, even thought both of us has mentioned Chennai US consulate as the probable place for stamping?

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