You don't actually need the Austrian lands to form Italy, it's just nice to get. If you weren't playing as 2S I'd point out it's not the 2S's capital you need but another province (can't remember the name). Oh, and you don't have to annex them, just controling them will do.
Also, in 1.03 Austria will have it's historical population (about half what it has now) and the unification events won't depend on France so it should be easier to pull off.
Also, in 1.03 Austria will have it's historical population (about half what it has now) and the unification events won't depend on France so it should be easier to pull off.