Your car is underwater too; you planning on selling it too?
Homeowners are not used to this situation:
But the situation needs a better perspective;
Could you RENT a comparable place for what you are currently paying?
Can you afford your current mortgage?
Then it doesn't matter what your house is worth!
The damage and expenses of a Shortsale or Foreclosure would far exceed your loss on "paying for a dead horse". In four years, you should be able to re-coup.
This, added to the fact that you have gotten it fixed up like you like it: right?
Good luck and may God bless