At this point I'd work for free just to get enough hours and recommend to secure my class 3.
Well, that is certainly one way to be held in disdain by your peers. Those who work for free lower the industry through their selfish actions. If you work for free while building hours for your Class 4, then why not agree to work for three quarters of what another Class 3 would be paid, half for a Class 2, and a quarter for a Class 1?
Almost every pilot has said the same thing at one point or another in their career, but the vast majority don't act on it. Most companies I know or have worked for immediately turn away pilots who agree to work for free. Its a level of desperation they don't want in their organization. As the holder of a Commercial Pilots License, you are a professional pilot. That means you get paid for your experience, knowledge, and skill. If you want to work for free, what was the point of earning a license that permits you to work for hire or reward? You should have stayed a Private Pilot and gotten friends to help share the cost of flying.
You say that you're concerned age is a problem, that you're 35 and you think the issues affect you more than a 20 year old. Not at all. Age is no factor here, only that which you place upon yourself. I've trained many pilots across many parts of the industry who started flying at 35 or 40, were well into their 40s when they started to instruct, and some were into their 50s when starting at a regional airline. Each had personal issues that made their career difficult. Some had families, some had businesses, but all made the necessary sacrifices to make it work. If you use it wisely, your age can be used for enormous benefit when applying. You have more life experience, maturity, and common sense than a person in their early 20s, and you should lean on those transferable skills when applying. But again, you chose to complete an instructor rating at a school that was not hiring, placing you at a point where you are applying at the low end of the annual cycle, so of course you can't find any work right now. But agreeing to work for free is not the way to do it. Sure, you might get some flying that way, but no respectable person will hire you down the road.
The industry is cruel, it eats its young without compassion, and as blorgwinder says, only those with resilience and tenacity survive. If I can be frank for a moment, you should have thought about what the impact to your family and business would look like before you went down the road of completing the instructor rating without the school agreeing to take you on. A pilot in their 20s doesn't have the life experience to avoid being caught up in the hype and emotion. A pilot in their 30s should have the life experience to avoid those mistakes. Sometimes waiting a year is the way to do it. Actually taking someone up on flying for free is not.