An example of computing Ext

First, as Aaron mentioned, a homomorphism from $M$ to $N$ is uniquely defined by its image on the generator 1 of $M$, and it must commute with the action $x\cdot 1=y\cdot 1=0$. In particular, if $f$ is such a homomorphism and $\bar{f(1)}$ is a coset representative of $f(1)$, then you must have $x\cdot \bar{f(1)} \in (x-1)$. Since $\mathbb{C}[x,y]$ is a UFD and $x$ and $x-1$ are both irreducible, this implies that $\bar{f(1)}\in (x-1)$, i.e. that $f(1) = 0\in N$. So, that hom-space is 0, and that's good news for the next computation (see below).

As for your computation of $\text{Ext}^1$, you have forgotten that $N\mapsto \text{Hom}(,N)$ is a contraviariant functor and you have to turn your long exact sequence around accordingly (indeed, there is no obvious way of defining the map $\text{Hom}(K,N)\rightarrow \text{Hom}(\mathbb{C}[x,y],N)$, while it's perfectly clear how to define the map the other way round - namely by restriction; similarly $\text{Hom}(M,N)\rightarrow \text{Hom}(\mathbb{C}[x,y],N)$ should be defined by composing homs with projection). See if that gets you anywhere and feel free to report back.