cml
Last time i went to Sydney (earlier this year), my gf and I stayed at The Rocks.
From there, we walked to this place:
http://www.hobbyco.com.au/
Located in the Queen Victoria Building. It wasn't too hard to find, about a 1 hour walk from memory.
An hour from The Rocks? You must have been walking very slowly or looking at lots of things along the way. It shouldn't be more than 10-15 mins. (Or two stops if you catch the train.)
Unfortunately, Hobbyco is long past its prime. It's more of a boutique place now. Back in the late '70's early '80's it was as close to an Alladin's Cave for hobbies as one could get in Australia. Now it's just another shop, but it's the pretty much the only one in the Sydney CBD.