The latter is merely a phonetic transcription of the former

Which is what I thought - hence my confusion at the "or" offered by our Silken Moose.

but then it's a word that is pronounced as one would an Italian word with that spelling.

This, I don't get. It is an Italian word with that spelling, and we pronounce it as such. I do believe I have missed your point.

Now I can't even remember where this all started...Oh yeah - the whole Aussie thing. I'm with you, Faldage, the double S suggests to my US'n ear that they should be sounded just like in "class," ('cuz Ozzies've got so much of that).