The fact that you're upside down has nothing to do with the situation you're in, you'd be in the same situation if the place was still valued at what you paid for it.
So, I can't for the life of me see why you'd want to destroy your credit rating for many years to come just to lose money on a house that's exactly what you paid for.
The fact that the place needs repairs etc simply shows you were overextended from day one OR that you've spending on other things instead of maintenance on your single biggest asset !!
I just wish the laws were the same there as the rest of the World where there's no possibility of "walking away from it", here the debt would stay with you until you either repay it or die (and even then it would come out of your estate if you had one).
Sorry but I have no sympathy for people who have absolutely put themselves in the position they're in and now want "somebody" to carry the can for them !!