You are a type 2 diabetic treated with metformin (which is asking your liver to release a little less glucose) and diamicron (which is a sulphonyurea which is stimulating your beta cells to produce more first phase insulin). Your pancreas clearly is producing insulin. The problem isn't lack of insulin production, it's insulin resistance.
Insulin resistance in fact causes type 2 diabetics' pancreases to produce far more insulin than normal. In some type 2s this over work can wear out the insulin producing beta cell and exhaust them to a point where they are no longer able to produce insulin.
In type 1 diabetes the immune system get a bit bored or over enthusiastic and decided to kill of the insulin producing beta cells meaning that the pancreases of type 1 diabetics do refuse to produce insulin (or at least any significant insulin to keep them out of DKA and alive) because the auto immune attack has killed off the insulin producing beta cells.
High haemaglobin is when you have a higher red blood cell count and this happens to improve oxygen availability in the blood. Haemaglobin count doesn't have any impact on blood sugar or on the functioning of the pancreas. It may alter your hba1c reading, in which case seek a fructosamine test as an alternative.
The body adapts to higher or lower than normal blood sugar levels because it is adaptive. This adaptation doesn't alieviate the consequences of being out of the normal blood sugar ranges, it only numbs the symptoms of hyper or hypoglycaemia. Many people mention false hypos when first diagnosed, this is when because you have been running at high blood sugar levels for an extended period your body panics and wrongly thinks that normal blood sugar levels are too high and causes hypo symptoms at normal levels. The only way to deal with this is to let your body get used to the normal readings and teach it that they aren't anything to panic about, because your body is adaptive it will adapt to the normal levels.
