So far I've been registered to vote at my parents address since I moved to Japan 10 years ago and have successfully voted by proxy in all general elections and referenda since then. Never had an issue with the yearly renewals - they send letters by post and email me a pdf version, which I respond to online. (Why can't the NI system be so simple?!).
Surely the Electoral Commission are the ones in charge of the system so could have explained the rules - strange that they would ask you to ask the Embassy here! Who did you speak to at the Embassy? Can't imagine they have an electoral commission representative there.
I was thinking to write to my (Labour) MP to see if he can ask the government if it plans to honour the pledge - assume as a current registered voter it would be within my rights to do so... Might be useful if others who are similarly keen to preserve/regain their right to vote did the same?