Dont go Canada for study neither join any college here and change your status to H1. Its not clear you got your H1 from Undergraduate or Graduate. If you have done undergraduate it make sense to join graduate but if you have done graduate and you are going back to undergraduate or graduate again thats waste of time and money.

You wrote you are in H1 from october 2008 right so as I and it dint been long. Its not your problem or my problem, this is the problem of million people now so I think as soon as you are in H1 it wont be problem. If you employer is threating you that they are going to cancel your H1 its different thing but if you are worried that you are not paying taxes or you are not genearting any pay stubs then that should not be the problem as far as I think that doesnt mean its hunderd percent right.

I can give you some suggestions like, why dont you work outside for time beings and pay your H1 taxes unitl you get a job. It wont be like this forever so you have to wait for right time. I see many people who are fraustrated and going back to school again because they dint get H1 so dont do that mistake going back to f1 from H1 that you have as far as its really necessary and you will be out of status in H1. Once your H1 is canceled or transfered may be its hard for to get it again and I hope you dont want to be in F1 for always