Hey there. I know exactly what you are going through. To be honest, I didn't bother doing anything about Jasmine's sleep (or should I say training) until she was 4 months old. She was more settled by 4 months and by that time Isabella had gotten used to her (more or less). It was still VERY hard and I remember just as I was finished with shh/pat & Jasmine was about to fall asleep, Iabella would come storming in, screaming on the top of her lungs.... "MUMMY!!!!!". Very frustrating.
I would have a look on the 2under2 forum as well but just to let you know some of the things that worked for us.
* I used the babybjorn alot to help Jasmine catch up on sleep when she was at the overtired/exhausted phase. Especially towards the end of the day, when there was no time to stand over the baby with a toddler running a muck in the house, the dinner had to be made and what not.... So I think its ok to help her out during the day. In fact, she was sleeping on me (babybjorn) for most of the naps. The only nap I tried to extend was the afternoon nap. We always aimed for a long pm nap otherwise it was catnaps throughout the day
* if possible get someone to help you out with the toddler. Can someone else take her to playgroup, park, etc... while you are sleep training. Really it only took me 2 weeks of staying home everyday so I tried to get my parents involved and made it that ALL naps are at home for those 2 weeks.
* buy new toys (especially outdoor if the weather is nice). Isabella LOVES water so that made it easier for me. I could fill a little bucket for her and she would happily play with that for a while & I was able to concentrate on Jasmine's naps. I also got her beach toys(buckets, sandpit, gardening toys, pretend kitchen tea stuff)... something new that will interest her & ONLY take them out when you are sleep training. Otherwise she might get bored quickly with them and you son't want to be bying new things every week, lol
* talk to her and tell her you are with the baby, the baby is tired and needs some sleep. That you'll be back and play with her when you've helped the baby get to sleep. Isabella was only 14months when Jasmine was born and there was only so much she would understand but I still tried to talk to her so that she didn't feel left out while she was on her own in the backyard.
* I think its better that she takes lots of mini naps than stay awake for such a long time and be extremely tired by evening. So if you are out with the toddler, try to get the baby take the nap in the pram. Like I said, I only ever worried about the afternoon nap.... (which would be the 1pm for you but Jasmine used to have 2 catnaps before the big nap).
I did ALOT of AP (I BF her to sleep cause I was too scared she was going to wake the toddler up). There did come a point though when it was too exhausting and I bit the bullet and did shh/pat for all those nightwakings. I think if you are serious about her nighwakings and sleep training in general, I would take 2 weeks off and try to train her. Once the nightfeed is done, change nappy, etc... I wouldn't rock, stroke hair, etc... put her back in the cot and see how she will go on her own. If she's fussing and moaning let her be. She might just surprise you and fall back asleep. If not, do the shh/pat.... It will pay off in the end.. I swear