First of all, you aren't insane. Normalcy is like a Barbie doll, nobody's really that thin, and the notion of insanity is promoted at the expense of the people so that pharmaceutical companies get rich, free-thinkers can be put behind bars, and the masses remain ignorant and obedient. Since most of society is quite literally insane, it's understandable for people who realize this to think they're the ones insane, for they are in the minority. But they're the lucky ones. 
You seem to have a good understanding of how the universe works, compared to most people. Indeed you can't escape from of existence, for you'll always come back until you get it right. The key is to realize that what lies in front of you isn't an infinite of misery and dread, but rather one of love and joy. Don't misunderstand infinite so totally to the point of perceiving infinite love and joy through a perspective of fear.
You feel like you failed us and you want our forgiveness. First you have to find out why you feel the way you feel, find out the thing at the root of these illogical emotions. You feel like you want to die, for life is a burden, life is suffering. Life is the greatest scapegoat.
The egocentric mind is innately self-annihilistic, for if reason follows its natural course it ultimately realizes that it must transcend itself. If your current egocentric world model is overly rigid and defined, if you cling to it too much, then you must stop associating your being with it before you can progress to a higher level of awareness. To transcend the ego, you must be willing to leave your old world model, now understood as being outdated and false, behind.
"I stopped, in the middle of the building and I saw the sky"
You're in an intermediary stage of your spiritual journey. You're looking towards its beautiful end and becoming discouraged at the distance between there and here. You know infinite bliss is out there, but you constantly look to the future and desire it now. Understand that it never arises out of a desire for it, but rather it arises naturally when your desires are pure (love, compassion, selflessness, etc.). Also understand that the path between here and there is a magnificent journey that necessarily gets progressively more joyful and exhilarating, not to mention easier.
Focus on the here and now, on the step you're current on, and surrender to the joy of the journey. Don't fight the present and look to the future, for then you'll never move forwards and you'll never attain that which you seek.
You have indeed locked yourself in a cage, that of your ego. It's good that you realize this. You put yourself in a cage and, as a result, you feel sorry for yourself. You don't need to ask us where the problem lies, for it's clear: you're the one putting yourself in the cage. Similarly, you don't need to ask forgiveness of us, but rather of yourself. Your ego has sinned against your true self; it is sin by its very nature. It feels sorry for itself, for its sinfulness, and seeks forgiveness from your true self. The proper course of action is to overcome, to transcend, your ego.
The ego isn't all illusory, and to label it so is merely denying its existence and sweeping its sins under the rug. But it isn't entirely real, either (existence, like truth, is relative). Physically, it exists as the part of your brain which creates tunnel realities which, in turn, combine to form entire world models. You can't completely dissolve your ego because these elements of the brain are always present.
Metaphysically, however, the ego exists as a projection of your ideal self, the culmination of all these tunnel realities. This projection is ideal in that it's exactly how the ego thinks you should be. The ego's ideal image of you is, in reality, quite far off the mark, and this ego projection is entirely illusory. This is the part of your ego that you must transcend.
Transcending the ego, therefore, involves creating your tunnel realities and world models as a fully conscious action and subsequently rendering your ego projection into an 'open' system instead of a 'closed' one. That is to say, don't cling to the projection and don't associate it with who you really are. It's but an illusory reflection that you, as the ultimate creator, can manipulate at will. You don't conform to it, but rather it conforms to you.
Now the daily input you receive isn't cross-checked with your ego projection and filtered/biased accordingly. Instead, it's absorbed objectively and your ego projection and world model changes appropriately. If you cling to your self image then it's rigid and defined and you don't want it to change. But if you attach primary importance to yourself and secondary importance to it, then it becomes malleable and more able to go with the flow. If your ego is in a constant state of change and transcendence then instead of resisting and blocking the flow of your subconscious, it accommodates it. You are but an empty vessel for this flow.
This may come as a shock to you, but it's essential to understand it. God doesn't exist...nor does he not exist. Once again, existence is relative. God exists symbolically. Indeed, your entire external reality is symbolic of your inner state of being. That you perceive, externally, yourself to be separate from God signifies that, internally, you cling to your ego and you have yet to associate yourself with your true, inner self. This is what's meant by becoming your own God.
God is all that ever was, is, and will be, yet it's difficult to connect to his light. Extremely frustrating. Externally, you are *here* and he is *there*. You feel so sorry for yourself, so detached from the light. The ultimate realization is this: internally, you ARE God! Your association with your egocentric self is the very thing that's keeping you from seeing this. You must transcend your very own self. No wonder you speak of self-pity and death, for indeed your ego realizes its innate self-annihilistic drive and it hates itself for what it is. It realizes that it must die for you to move forward.
You put it perfectly: you live in yourself. In reality, you aren't trapped in yourself, you are yourself. There isn't your ego and you, there's only you. And you are God, you are everything, and you have complete control over your own mind. There is nothing to fear but fear itself. The only reason that you don't have control over your own mind is, paradoxically, if you believe you don't. The ego, and all that is conventional, is paradoxical like this so that the question comes full circle so that it might transcend itself, realize that it's its own answer! There is nothing to fear but fear itself! 
You need to stop reacting and start acting. You need to take control of yourself, and your life. Be warned: this will change your life drastically. Who you're friends with, what you do with your free time, what your goals and motivations are in life, and how you act daily, all this will change. These changes are all for the better!
Your ego would have you believe that it's best to remain static. After all, it can't very well sign off on its own destruction. But don't be fooled: change is the only constant, so you're always moving either forwards or backwards. Thus, if you aren't moving forwards and you think you're simply static, then you're being fooled. In reality, you're moving backwards, progressively engraining egocentric tendencies of escapism, cowardice, and resistance into your routines, into the tunnel realities of your mind's world model. The longer you wait, the tougher it will be to break these tendencies. The more you reinforce them, the sorrier you'll feel for yourself in the end, despite any short-term high.
God does indeed control Satan, who also exists merely symbolically, like a puppet. Apply this knowledge to your inner state of being and consciously take command of your ego. Satan represents all that is the Outside, all that is unknown, all the parts of you which you deny, which you try to run away from. Confront yourself. Transcend these unknowns by exposing them to the light of your inner self: no darkness can remain where there is light.
To transmute Satan into God, you must leave behind all parts of you that are conventional, that are harmful and related to your ego. This will cause pain only if you observe the changes through an egocentric perspective, that is, through the perspective of that which you?re leaving behind. If, conversely, you observe the changes through the perspective of your true inner self, the part of you that?s being liberated by them, then they are most certainly welcomed occurrences. As you reconcile your inner state of mind, new found inner joy is reflected outwards into your external life and you understand Satan to be nothing more than an illusion. All that is of him?pain, suffering, sorrow, pity, loss?is instead perceived positively. To the inner self, the ego?s destruction is a positive thing.
To this end, you must completely surrender yourself to God, that is, surrender your egocentric self to your true self. You must render your egocentric mind open and allow your subconscious, which is your innate connection to the fundamental, to flow through you freely, unobstructed by selfish desires, judgements, or beliefs.
What is the fundamental? The Ineffable. God, in a way. It?s the universality you experience during the height of an etheogenic, or religious, or mystical experience. There are an infinite number of levels of reality, from the absolutely conventional to the absolutely fundamental. Everything is nothing, God is Satan; you?re correct about that. In the fundamental, notions of individuality, definition, and distinction are non-existent. The Fundamental, in this sense, is so subtle that it is non-existent. The Tao is the unseen puppet master behind the scenes, the creator of coincidences. It is necessarily not an individual being, but rather the culmination of everything that ever was, is, and will be.
Since it is everything, it is necessarily you. Your ego tries to separate yourself from it, to gain (arbitrary and false) independence and sovereignty. In reality, you are universally and fundamentally connected to everything else, and the extent that you are God lies on the extent that you surrender your individuality to him, to yourself. The journey is a long one, but it is filled with love and joy! 
Please feel free to contact me and we can talk some more, for I have travelled this path, I can attest to its correctness, and I can point the way out to you. But I cannot walk it for you.
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