If your mortgage/taxes/insurance is $900 and your rent is $850, couldn't you just move into your rental and at least pay down your own mortgage instead of your current landlord's? That way, you would have a little more time to make a decision on what to do. You have to live somewhere, you might as well be advancing your own net worth with your living expenses, than someone else's.
You only lose money on a house that's underwater if you sell it. If you think you'll take a capital loss, but you also think you're going to stay in the area for a while, I don't see how it could hurt you to move into your rental.
The risk here, is that the housing market in your area could continue to go down, and you would lose more money in the future. But, like the stock market, the housing market has historically been on an upward climb forever, so you could always wait it out.
Housing is tough! It can definitely feel like gambling sometimes. Best of luck to you!