Ok, how does this sound for a solution?

The first few lines of the generated ext/service.js contains this:

Liferay.Service.Portal = {
	servicePackage: "com.sgl.portal.service.http."
};

Thus, when we have in portal-ext.properties this:

        liferay/service.js,\
        ext/service.js,\

then these opening lines of ext/service.js wipe out almost all the javascript defined in liferay/service.js.

The solution is to delete these three lines from ext/service.js.

DOH!

I think it is being replaced, not merged. So you need to include all the service.js plus your changes to make it work.