Fight for your rights. More importantly, fight for your good name and reputation.
You know what my previous employer accused me of by my postings on the original IWETHEY website. Before my father died in 1993, he stressed his valuing of our family name and reputation to yourself, family, friends and the community at large. It's the old saying about "you can't take anything with you when you die but you leave behind what people think of you" (something to that effect). One of the best things that he taught me.
I refused to let them deny me unemployment because of false accusations. I found a lawyer who had gone against them before and was willing to take my case. My wife and I argued about spending several hundreds dollars on legal fees when I had nothing coming in. I stressed how important it was that I clear my name by getting unemployment - had I not gotten it, it would have been a tacit admission that they were right with their charges. This way I could tell future employers that "they released me, I'm been receiving unemployment while I'm taking classes electronically and at night". No lies, no tricks, and you can keep your head up high during interviews. But had I never challenged them at all would have been to defeat myself and let them win without their even breaking a sweat. You will feel a perverse sense of pleasure when you hit them with questions that they will try to evade, hammering points that support your side while they dance around hard "Yes" or "No" answers. Like in a TV courtroom drama, making them squirm will help get that monkey off your back.
Getting them to admit to some of your points will make your spirits soar.
Am I still bitter about how I was treated almost 1 full year ago? Yes. I've never been through anything even close to that in my career. But I was lucky to find a new employer during a recession, where I'm paid much more, work at least 10 hours a week less, and have what I consider better management when it comes to dealing with their employees. It can be done, Norm. Break out of your funk, keep hitting the recruiters, consider all options (full time, part time, contracting) and don't give up hope. We're behind you.