My dog has diabetes, too, and I was wondering how yours is doing. If it makes you feel any better, my boy was diagnosed 3 years ago, and while he's not problem free, he's bounced back from everything that's happened. I started a blog (
Living with a Diabetic Dog) to talk about the day-to-day issues that come up. I think it's important to let people know that there are plenty of folks taking care of diabetic dogs so that more will at least try to deal with it before looking for other options.
Hang in there. My thoughts are with you.