Emergency on H1b, please help!!

[jimmyzhu]

I was hired by a company on 07/24/06. The company filed a H1-b petion on my behalf in June, 2006. Between my H1-b peition pending period 09/28-10/06, I traveled internationally because of a death in family and re-entered US using a F1 visa (not expired at that time). About one week after my return , I was informed that my H1-b was approved. However, the approval date was 10/3, which was the date during my travel. I expressed my concern to the a company lawer and I was told I was fine and no further action was needed because on my I-797A, it indicates that both my petition and change of status were approved.

It turned out they were wrong and now I might be in a serious trouble because of the so-called 'last action rule'. Hence I was still treated as a F1 working using the OPT since my return using a F1 visa overrode my h1-b so my change of status was void. My OPT has expired on 6/19/07 and plus 60 days grace period, my whole F1 is expiring on 8/19/07. I talked to a more senior lawyer in the company and she said she will file another change of status immediately on my behalf. Now my qustion is

1. Should I stop working right now since my OPT has expired?
2. Will my new change of status be approved?
3. Should I leave the country after 8/19/07 and re-enter after Oct. 1st,2007? (I took one h1-b quota in 2006, not this year)

Thanks much for your advice. I just bought a house and started my career. I feel really sad now.