I am running out of options... should I try a short sale with Bank of America

I am in a situation were I lost my job. I found another job, but took a pretty big pay cut and now have to drive about 140 miles each day to work.

I have had my home up for sale with no luck, so I decided to try a short sale on it. After a few weeks I received a letter from my bank saying that my interest rate was going up to 9%! So I took it off the market to try and refinance. Unfortunately I can not refinance because I had the home up for a short sale and will not get approved even though my home appraises for almost $20K more than I was trying to sell.

I really would like to get into another home closer to my new job but do not want to hurt my credit that I have tried so hard to rebuild.

With my interest rate going up and what I am paying for gas I am at a point where I will not be able to afford my mortgage payment any more. I have not had any late payments as of yet and had none since I have been in the home ( close to 4 years).

Please let me know of what options I have without hurting my credit too bad. I am running out of options and do not want to have to foreclose!