You are dealing with a sticky situation... which is nothing you don't already know, but it would definitely be worth a few hours of an attorney's time so you are fully aware of all your options and the corresponding consequences.
It does seem like a disproportionate amount of money to pay out every month versus the amount that you have lost in equity. Exactly how much negative cash flow do you have between the rental income from your rental lease and your expenses?
If it is any consolation, median home prices went up for the first time in three years last month... have you calculated exactly how much you need to keep things afloat? Can you raise the rent? Cut costs? Rent the garage?

