Since I don't get the scenario and this gets abstract as hell, I'll have to go step by step
can there be a fuck up so massive, that it makes the rest of your life next to irrelevant?
Yes, with, say, nuclear weapons. But not on the scale of western culture social life. Maybe in feodal Japan?
If the change you have to make to survive letting something go would be so radical, that it would change everything you are (and want to be), would you consider it worth it? If the fact that things will get better does not matter?
Depends on what there is to
gain by not letting go. Never mind the radicality: of course people don't want to change, but not wanting to change doesn't seem to be even a decent reason for unhappiness. Although usually in life that's actually the only reason.
Can something be so important, that it goes beyond happiness?
Looking the way people live... apparently it can, but I don't think it should. By intentional suffering one isn't good for anyone.
If you could choose between those two, and every rational thought tells you to choose happiness, but you'd still rather have the other option? If it feels to be the right thing?
The worst screwups I've made have felt right

On the other hand, I think I usually was pretty much out of options. Well, not really, but that's how it felt. Feelings are not to be trusted, neither is reason. Reason may be even worse, most of the time it's just making excuses.
Anyway: I can't think of a situtation where choosing happiness by letting go wouldn't be the right thing to do. Assuming there really is no hope.