Is there any hope or is it best to cut your losses and look elsewhere?
If by "look elsewhere?" you mean that you might consider an alternative field of work, not fly for 12 months, then reapply; then you're unlikely to be successful in 12 months.
I'd think finding whatever flying job, or staying in the present job, and gaining more experience & skill can only enhance your chances of success.
If one is to cut their losses at the first hurdle, many would interpret that the goal was not that important.
Hang in there I say.