Dude,

I agree with the advisors' suggestion to try out different DMVs. The people at the DMV you visited may not be aware of the rules or may not be flexible enough to try to explore in the matter or understand the case. So, try out at a different location and be polite and firm that you should be able to get your DL renewed with the extended I-20 as you can legally work and stay in country. Tell them to inquire with their superiors at the State Level if they do not seem to be positive, but you should be/sound confident. I have seen people getting DL in second location after getting rejected at the first one. So, it's certainly worth a try.

Good Luck.