Second the Elance (or third, whatever). It's hard to compete with the third-worlders there, but man - you're starting from nothing. You should be able to double your income in your off time.
As soon as you're making $500 a week - which will really not be a problem on Elance for anybody competent with a good grasp of the English language - quit. Just walk out the door. No notice, just at the end of the day, go to your boss and say, "I'll be leaving now."
Then tell him your new hourly rate for consulting. Make it a good one. If you're as indispensable as you sound, you'll be working the same job with a reasonable rate within a few weeks.
I'm not saying do it full time, just walk out of this currently nonsense situation and do elance for a few months while you look for another full time job.
You'll be amazed at how many opportunities there actually are in this world that don't suck once you start looking.
You'll be fine dude!