I'm not sure if this is considered simpler. 😉

SELECT duration, SUM(iduration)

FROM (

SELECT duration,

Item * CASE ROW_NUMBER() OVER( PARTITION BY duration ORDER BY ItemNumber DESC)

WHEN 3 THEN 3600

WHEN 2 THEN 60

ELSE 1 END iduration

FROM #tmp x

CROSS APPLY dbo.PatternSplitCM( duration, '%[0-9]%')

WHERE Matched = 1) x

GROUP BY duration

ORDER BY duration

You can read about dbo.PatternSplitCM in here: http://www.sqlservercentral.com/articles/String+Manipulation/94365/