None of us know whether or not the mercury has a long term influence or you have any other medical problems so thats obviously something to discuss with your docs .
Otherwise I agree with Carbsrok that many of the problems you have could be caused by your high overall bgl and the swings from high to low. The difficulty in revovering from small infections might well be because your blood glucose is running too high.
If you don't know how to carb count and dose adjust the books suggested earlier are excellent. A DAFNE course would help you both learn and also meet other people with type 1 helping you feel less isolated. In the meantime, to get started, there is a very good online course here:
http://www.bdec-e-learning.com/
Getting back to exercise is important, it should help improve your fitness but also your feelings of well being but perhaps you need to take small achievable steps rather than try to take on too much too soon. There are also some things to think about.
1)the blood glucose level you are starting from. An Hb A1c of 8% means that your levels are averag ing about 10mmol. If you start exercise at higher levels (particularly over 13mmol) you may have insufficient insulin to overcome the resistance caused by the high blood sugars . In this case your muscles can't get the fuel they need. The result is poor performance (no energy) and increased blood glucose as your liver releases more in an attempt to fuel the cells.
2) some forms of exercise lead to a rise rather than a fall so could compound matters.. These tend to be activities that are anaerobic rather than aerobic. The problem often arises with weight training activities,activities which have short bursts of fast running or activities that cause adrenaline/cortisol to be released as in competition or things like martial arts.
3) Even if you are trying to do cardio as in running .If you are unfit because of a previous illness you could be in the anaerobic zone quite quickly. It might be a good idea to take things really gently, first walking, then walk a couple of minutes run 30 seconds, etc, gradually working up and being guided by a heart rate monitor.
From the runsweet site
http://www.runsweet.com/index.htmlif you are training at
60-70% max heart rate
you will be able to do prolonged exercise, and your blood glucose will start to fall after 20-30 minutes,and may fall quite a bit after 40 minutes.
70-85% MHR
Now we're talking, this is the standard training zone, again you blood glucose will fall, but more speedily and fatigue is likely.
Above 85% MHR
This is in the anaerobic zone, you won't be able to do this for long, and the blood glucose values are likely to be higher after you finish, if there is not lower intensity exercise.
With any exercise it's really important to test before, during and after and have glucose tabs or some other form of sugar on hand to raise levels if necessary.