The 26-year-old native of Invermere, B.C., finished 12th in a World Cup downhill race over the legendary Hahnenkamm course. Thomsen met the Tier 1 criteria for nomination to Canada's Olympic team in the final race before the qualification window closed.
Hannes Reichelt became the first Austrian winner of the event in eight years on Saturday, posting a time of two minutes 3.38 seconds. Norway's Aksel Lund Svindal was second in 2:03.59 while American Bode Miller took third in 2:03.72.
Starting 50th overall, Thomsen had a time of 2:04.80. Vancouver's Manuel Osborne-Paradis was 16th while Jeffrey Frisch, of Mont-Tremblant, Que., was 28th to earn his first top-30 World Cup result of the season.
"It's been a whole season of just trying to get in the points," said Thomsen, whose best previous World Cup result this season was 37th in downhill in Bormio, Italy. "You lose so much confidence when you're not getting results.
"I wanted to go out there and I wanted to get an amazing result. For me, 12th was an amazing result. It was just good enough — I'm so happy I wasn't 13th! I would put it in the top-five best runs of my life, feeling-wise."
Thomsen went into the race knowing he needed a top-12 finish to secure an Olympic berth. When he crossed the finish line Saturday, Thomsen let out a loud yell.
"There's just something about Kitzbuhel,"he said. "There are so many people here and they love ski racing so much.
"It's been a tough year but the team is always right behind you, pushing you, supporting you. When you come through the finish area and you look over to your teammates and see them smiling and celebrating it's really special."
With the likes of Arnold Schwarzenegger and Formula One boss Bernie Ecclestone looking on, Reichelt avoided the mistakes his rivals had made earlier. He was loudly cheered by 50,000 spectators when the green light for the fastest time appeared on the time table in the finish area.
"This is like dream," said Reichelt, and admitted he had "little tears in my eyes" during the flower ceremony.
"Being an Austrian, coming down this course and winning here in front of all these fans, is a huge present," he said. "This is a real highlight of my career. If you win here, you are a legend."
Michael Walchhofer was the last Austrian to win in Kitzbuehel in 2006, and Reichelt's victory will be a big boost to the Austrian men's team two weeks before the start of the Sochi Olympics. The former "Wunderteam" left Vancouver without a medal four years ago and is poised to improve next month.
Just 15 minutes before the race, Reichelt wasn't even sure he was going to start. Suffering from persistent back problem, the 33-year-old Austrian did some free skiing to find out whether he would be able to compete without unbearable pain.
"I wasn't feeling too well (Saturday)," Reichelt said. "But I don't want to talk too much about my back problems.
"If you win a race, it can't be too bad."
Reichelt celebrated his seventh career win but only second in the discipline. Reichelt was also the last Austrian to win a World Cup downhill, in Bormio in 2012.
By finishing second, Svindal extended his lead in the overall standings to 102 points over second-place Marcel Hirscher of Austria, who doesn't compete in downhill.
Svindal also tops the downhill standings, leading Reichelt by 440-360 points.
The Norwegian, who won a super-G here last year, is still chasing his first downhill win at the Streif.
"Coming second in Kitzbuehel isn't too bad for a result," Svindal said. "Bode had a mistake, otherwise he would have been unbeatable. I was happy that I was ahead of him when I finished, but I knew you could be faster. And Hannes showed just that."
It was the first downhill podium for Miller in almost two years. The American returned to the circuit this season after sitting out the complete 2012-13 campaign following micro-fracture surgery on his left knee.
Miller had dominated the only training session two days ago but had a costly mistake during the race when he came off the race line at the Seidalm section halfway down the course.
"Winning training runs doesn't do it for you," Miller said. "You've got to execute on race day. It's too many times that I've made these stupid mistakes that aren't really forced. They are not forced errors. It's not on a tough part of the course, it's just a real basic part. So, it's pretty heartbreaking."
The Hahnenkamm weekend is concluded by two World Cup events Sunday, with a super-G race that also counts as the first portion of a super-combined, followed by one floodlit slalom run.
With files from The Associated Press