I am so sorry! <img src="i/expressions/brokenheart.gif" border="0"> I know what you are going through. We tried to have a baby for 10 years, before our daughter was born, but we never really found out what the problem (other than eggs not fully maturing and regular cf stuff). I don't know why this is happening to you- maybe, like has been said, adoption would be an option. Maybe, there is a child out there/going to be out there, who needs you two for parents.
But, and I know that this is not really what you want to hear right now, but it sounds like you do have a really good doctor, who won't be mincing words, will be keeping you fully informed, and whose main concern in all this is you. That is so important!
Secondly, it doesn't sound like they have said "forget it", just that they have a good idea what is going on with you, and while it may not look good now, they are still pursuing options and haven't shut you down completely. That is good news.
And the diabetes- knowing that you need more/different/meds, and getting it under control before you start having issues is a good thing too.
I know that those things aren't really important at the moment, but maybe when you and your husband have some time to breathe, and contemplate, and deal, it will help a bit. I will be praying for you on all fronts...