I think the 365 days applies to only your labor. look at the path2usa site.
Search google for "h1b 7th year extension". It should be the first site. They clearly state:
Quote:
Under act AC21, a H1B can be extended beyond 6 yrs if :
1. Applicant's labor for Employment based green card purpose is pending for more then 365 days.
2. Applicant's petition for I-140 is approved under employment based green card and AOS/485 is pending due to Visa numbers unavailability.
All dependent family members are also eligible for H-4 Extension beyond Six Years along with primary H1's extension. All the applications should be filed together for the family.
When to apply?
Under the change in policy announced in July 2004, it is permissible for an employer to file any H1B extensions after 6 years on H1B status, even before the LC or I-140 petition has been pending for at least 365 days. The start date requested on an H1B extension must be after the time when the Labor or I-140 petition has been pending for over 365 days.
End Quote.
Again an attorney is the best and final source.