Sigh. Well, I’m sorry you’re having such a tough time of it. You didn’t mention taking the guard’s clothes; you did that, right? The people you encounter in the first level are very very suspicious, and the clothes won’t help you in a face-to-face encounter. My guess is, the place is so small that everyone knows everyone else, and changing into guard clothes is only helpful in that it keeps people from noticing you from a great distance. In later levels, disguises are much easier to pull off. Another site I peeked at seems to feel that some persons (the Don’s son?) will shoot you on sight, so maybe you just keep running into that guy.
As for the second level, I’m going from memory, but here’s the way I did it and got the Silent Assassin rating:
The rifle really is there. Maybe you just weren’t positioned right to find it, but the rifle is indeed in the locker; he’ll take it out and assemble it when you pick it up. If you don’t see the rifle, reposition the Hitman until you do. Anyway, walking around carrying a rifle will obviously arouse a great deal of suspicion, so you’ll need to stay completely out of sight as you make your way out of the entry area. Dodge the civilians by going down onto the railroad tracks if you have to. When you’re clear, run up the stairs.
Careful once you leave the station, because there’s a guard who occasionally comes down from the street and patrols the hallway from the station to the street. Before you reach the street, you’ll see stairs leading down to a room where there’s another guard. Slip down there and through the door when he’s on the other side of the lockers.
Pick the lock and head into the sewers. I can’t remember the route I took, but I ended up across the square to the southeast of the building you need to get to. As I came out of the alley, there was a guard near some stairs to my left (South). He’s alone and quite easy to sneak up on and anesthetize. Take his clothes. Now you’re much less conspicuous walking around with the sniper rifle. Run/walk to the building just west of the one where the meeting is taking place. Running probably won’t raise suspicion, but keep your eye on the meter, and don’t get too close to anyone.
When you’re in the building, head for the second or third floor, to a room facing the target building (you’ll have to pick a lock). There’s a guard in this building; don’t let him see you if you can avoid it. There are, I think, two open windows on the second floor, and one on the third floor. I was short on time, so I stayed on the second. Aim your rifle, wait for the description of your target, and take him out.
Once you’ve fired, immediately drop the rifle. The room you’re in is about to fill up with police. Get your ass to another room, quickly. Casually walk downstairs and out of the building. Head for another sewer opening. I found that if I tried to leave by the same route, I’d run into the guard I’d drugged, and he’d raise an alarm (plus he has that AK-47), so you might want to take an alternate route. Back through the sewer, back to the train station, and you’re a Silent Assassin.