Check out Goblin. They did some music for a famous Italian director, Dario Argento. That song reminded me of the theme from the movie Profondo rosso.

For newer stuff, I'm not exactly sure if it fits what you're looking for, but the album "One Nation Under a Grande Cassa" by Fare Soldi is a pretty good album. It's more dance oriented, I believe, but it has some good songs.
Per un amico by Premiata Forneria Marconi is the best italian progressive album out there.
Surprised no one mentioned Novembre!

They have a lot of prog influence and are Italian! occasionally sing in Italian. You should definitively check them out.

I recommend "Materia"