I'm a Tasmanian novelist and short-story writer. A few years ago, the Tasmanian Writers' Centre brought an agent down and asked for submissions from authors for her to consider. As I had already had a book published I was not surprised to be shortlisted. Unfortunately, it turned out that the agent was unable to offer any of us representation due to factors beyond our control. Thus, the whole thing turned out to be a disappointment and a waste of time. It is really difficult for us in Tassie, as we do not have the networks available to other people. Do you have any suggestions re agents who might actually follow through with forming relationships with Tasmanian writers?
I explored the issue of regional writers in this post so I won't go over too much of that ground, except to reiterate that I really don't think it matters where you live - if you find the right agent, then your relationship will work regardless of where you're placed. I have writers in Tasmania, as well as several other states; most agents would. Agents in the US certainly have writers from all over the country - most writers do not live in New York City, which is where the bulk of the agents are.
In the case you mention above I suspect it was more to do with what was happening with that particular agent than with the fact that you were in Tasmania. We really don't discriminate if you're not from Sydney or Melbourne. The greatest difficulty I find is the perception of writers outside the two largest cities - there is an idea that Sydney and Melbourne writers are hooked into some kind of publishing grid. They're not. The networks available to them are also available to writers elsewhere. Twenty years ago, this wasn't the case. The Internets have changed everything.
I've probably mentioned this before too but, if not, Varuna's LongLines program can provide opportunities for writers who are feeling geographically isolated.