An Aussie lives in my compound, and he has a Thai lady that he pays to take him around from time to time, and help with translation, etc.

He and her both reported the same to me-

He was here on a tourist visa and he went to Mae Sai and converted to a Non-O visa, and was told that if he comes back with the proper documents in three months time he will get a retirement extension.

I thought one had to go out of the country to get this done?!

It is possible to do a change of visa status from a tourist visa to a 90 day non immigrant visa entry based upon qualifying for an extension of stay based upon retirement at some immigration offices. You have to show the financial proof needed to apply for an extension to do the change.

Not sure when it was done at the Mae Sai office but it is probably not possible now. In late 2014 they took the authority away from most offices to the change.

This was accomplished only about a week ago.

I wish I had known this because I could have saved myself a good deal of money and time.

I thought it was clear that one HAD TO leave the country to get a Non-O.