I quoted your post above because although others have already shared good advice and sentiments. I want to focus on what you had to say here.
The first thing I want to tell you is that you remind me alot of myself about 15 years ago and I want you to take hope in the fact that someone else there (Me and many others) have gone through what you are going through and eventually pulled through it.
I can relate because it was in my late teens too when my hearing really started to decrease to the point where it really started to effect me socially. Along with that came a lot of depression. In fact let me tell you how bad it was for me when I was in my early 20's. For about 3 years I locked myself into what I now call "My cave". My cave was the basement of my parents house. The basement is basically an apartment. My schedule for about 3 years was this. I'd go to bars at night and stay there till bar closing. Then I'd go home, sit in my bed and watch TV and movies all night long. Usually till the sun comes up. Then I'd sleep all day and wake up just in time to go to the bar again.
That was my life. When friends or family invited me to go somewhere I always turned it down. I avoided any situation where I might be sitting in a quite place and have discussions. Bar's where different. I spent time with people but didn't have to have any real conversations. Just sit around, play pool and just small talk that I really didn't need to hear anyway.
This was my life. But my life is no longer like that today. I eventually came to terms with the fact that I'm now deaf and I'm no longer ashamed of it. I shouldn't say "ashamed" but what's really happening is "Self Pity". It's a matter of self confidence and it's not easy to have when you loose a sense like we lost or are loosing. But I want to tell you that it is possible.
I'm gonna take some guesses here at some of the things I felt in those days. Let me know if you can relate to them.
When with a group of people who are talking and joking around. You tend to feel left out. A part of you wants to join in and a part of you wants to walk away and find something else to do. You know that people who are close to you such as family and friends say they don't mind and will repeat things for you when needed. But you also feel that you are a burden to them. You're sometimes embarrassed when you miss hear something someone says. Sometimes they laugh at you because of your mistake. Sometimes you get upset with people and even when you try to explain things to them it's clear that they will never understand what it's like unless they had to live with it.
Those are just a few of the things I use to think and feel. I'm not going to tell you that those things still won't happen or that embarrassing things might happen form time to time because they will. A couple of years ago I had one happen to me. I was ordering food and I thought "I won a prize" but what they actually said was "Do you want fries". 
You see. Those embarrassing moments are only as bad as you make them to be. IF that fries/prize thing happened to me 15 years ago I would have craved to go home and lock myself in my cave again and probable cry about it. Today when it happens I laughed at it too because it was funny.
Here's the key. When something embarrassing happens like that then make sure everyone involved or witnessed it knows why it happened. It happened because you're deaf or can't hear that well. It's not about intelligence or ignorance. It's a condition in your life. Show them that you can see the humor in the situation too. That alone shows that you have intellectual and more importantly confidence. A confident and intelligent person would be able to see humor in a funny situation and not let it bring them down.
That's not easy to do. I'm not suggesting that it is easy at all. But here's my next piece of advice. When you first read this you're going to think it won't work but I'm telling you it can and I suggest you try it anyway. What I'm talking about is what I call "Fake it till you make it".
The next time you miss hear something and someone laughs about it. Laugh with them. Even if you feel like it's not funny to you or it gets you a little depressed. Pretend it doesn't bring you down. The next time you're with a group of people and feel left out. Stick through it and don't let anyone see that you feel out of place. Just think to yourself, "What would a person who has total confidence in themselves do at this moment?".
I know it seems silly but here's what's happening. You're learning that it'll only bring you down if you let it. The people around you will feel more comfortable and include you more when you don't look depressed. You'll also learn that it isn't as bad is it might seem sometimes.
Now having said all that. At the same time if someone really does do something mean to you. Respond to that too. When I say "Fake it till you make it" I'm not suggesting that you ignore it when someone does something that's outright rude. There are lines they shouldn't cross and there are jerks out there. But quite often the things that can make is feel embarrassed or left out isn't intentionally meant to be rude.
Here's another thing you could do. It's what I call "Small connections". You can put a time aside to do this or just do it when ever you're around people. Take for example you're at the mall or a park. Your goal is to make small connections with people. Just walk around and make yourself look happy. I'm not talking overly happy. Just look like you're a person who's in a good mood without a care in the world. Like I said, fake it. Now as you walk past people make eye contact. If you lock eyes with someone give them a small gesture. It can be anything. A nod of the head or a smile. You're goal is to get a gesture back form them. IF you give a nod and they give one back. That's a connection. If you smile and they smile back. That's a connection. If you're driving and nod at the person in the next car at a stop light. That's a connection. Don't worry if they don't give one back. This isn't a contest. It's an exercise. If you see someone with something worth commenting on, make the comment. Exp. "Hey, nice car".
This is a confidence building exercise and more specifically a social confidence exercise. It really does help.
Let me tell you that because of these things I'm now a professional entertainer that performs in front of thousands of people a year. What you're going through is something some of us call "Between worlds" because we didn't grow up in any kind of deaf culture so we don't exactly fit there. We also don't exactly fit in the "Hearing" world. IT IS POSSIBLE TO GET THROUGH THIS!
Keep your head up and you'll get past it eventually. Feel free to contact me anytime. Sometimes just getting an experience off your chest is helpful.
Ron Jaxon
