Not that I like traveling back and forth from Torino to Milano, but maybe this experience can be of use to someone. Just arrived back in Torino. Stopped at a cafe to check email, and just received the following from the Indian Consulate:

From: Indian Visa Outsourcing Centre <[email protected]>
Date: October 22, 2013 at 1:10:18 PM GMT+2
To: "Perche"
Subject: R: R: via

I passaporti sono in Consolato.
Grazie della collaborazione.

Con i nostri cordiali saluti.
Indian Visa Outsourcing Centre
Via Marostica 34
20146 Milano

Basically, the Indian consulate is confirming what the American Consulate said, that they have my passports. The Indian Consulate would not have given me back my passports while researching my suitability for a visa to their country. Much ado about nothing. The possibility of a lost passport is never fun, and perhaps someone else can learn from this mistake.