Trapped in an option ARM

I locked into a bad mortgage, a 30-year payment-option ARM. I borrowed $234,000 in February 2006. I now owe $246,000 at 8.5 percent with an $8,000 prepayment penalty -- bad deal on my part. I tried to get out but the vultures are coming in. Every month that I don't make the high payment, $800 is added to my principal. With the decline of real estate I will be lucky to get $310,000 for it. Got any ideas?
Hogan

Hogan,
I rarely tell people to sell their home, but in your case you have to in order to get out from under this crummy ARM. $310,000 is a good deal compared to what you'll end up owing if you stay in the house.