Well, I do a little of both when something like this happens. After that, you'll feel better. Easier said than done, but don't let it get you down. At least you hadn't cut the backing wrong and made it too short.
It's fixable! I'm sorry you put so much time into this, then have to re-do it.
I ordered 505 for my machine embroidered candy cane holder ornaments, and it was a LIFESAVER! I tried some other I had, but it didn't work on the felt and/or stablizers I was using OR it was old or something.
Hang in there! You'll get it!!