Keep optimistic
I just wanted to say that I have been exactly the same as you guys and I know how awful it feels when you can't get a break. I finished OATS in April 2005 and with a new baby, wife and large mortgage was in dire straits financially for a few months. In the end I fell back into IT as a contractor and that gave me the means to:
a) Enjoy some of life's luxuries that we had missed for two years
b) Repay some debt
c) Keep my ratings current and hire commercial sims occasionally.
All of the above greatly improved my self esteem and general mood. I decided that I might or might not get a flying job in the end but I would keep trying. I was also aware that age (I'm now just turned 38) was against me too as was the domestic pressure of supporting a family.
After almost two years I was invited to interview with Flybe, got throught the sim and type rating and am now on the Q400 and completely loving it. I am however currently based 400 miles from wife and child so living out of B&B etc which isn't much fun!!
I hope that this proves of some comfort to those of you still waiting for a first break. Also I'd like to say that flying the Dash is a blast with plenty of hand flying, no autothrottle, some great Captains and good training. The money isn't good (yet) and the roster is pretty much max hours but it's all great experience. I was every bit as fed up as you feel though before I got a break so my advice is:
Go and get a job that puts money in your pocket so you can sort your finances out and start 'living' a bit.
Make a small number of well put together applications
Don't obsess about flying - focus on other aspects of your life that make you happy - family, friends, music, photography etc etc
Keep current.