applying F1, want to cancel H1B which is under 221g - what are the chances ?

[dead dog]

Hi All !! My case is extremely complicated.

1. I got visa through wipro, worked in US
2. lost all my documents in United States
3. Got documents back one by one
4. switched to a xyz consultancy due to issues with wipro
5. I was back in India, trying to get visa re-stamped (remember, it was lost)
6. No client invitation letter - got blue 221g brick in the face
7. Now, the consultancy is sounding weird, I dont know them from scratch,
the president of the consultancy says, "send all your original documents to us through courier, especially, we want the 221g blue form, we will take care of the rest, there is lot is miscomm, I want the blue form original"
8. I dont trust them anymore, working with them makes no sense to me
9. I have planned for higher studies for a better future than this.
10. I have 600 gmat score, 7 yrs experience - If I apply for F1, will it work for me ? should I inform consulate and cancel the H1b before I apply for the F1 ?

Ive heard of cases where any visa (H4, travellers, F1 anything whatsoever like K, J, LMNOP) gets rejected without any notice if H1B is cancelled and a person immediately applies for another visa as is in my case...

Thanks in advance,
Dead Dog