My 6th yr H-1 expires next month (includes all reclaimed time), and i have applied for the PERM LC in June 2008.
1) If my LC doesn't come through, do i have any options in other than getting out of the country. I have heard people suggest change of status to B, F, or O visas, but i don't really understand how that helps.
2) If i do leave the country and let my H-1 expire, do i really have to wait for a year? Or can i re-invoke the old H-1 and apply for an extension and re-enter the country as soon as (a) my LC becomes 365 days old (1-yr extension), or (b) my LC & I-140 are approved (3-yr extension), whichever comes earlier.
If your labor certification is not approved and your H-1B expires, there may be other visa options available to you. However, each visa has specific requirements so it is important that you consult with an immigration attorney to determine whether you qualify for other visas or whether those visa options fit within your immigration plan.
If you leave the country at the completion of your H-1B, you may not have to wait for one year to return in H-1B status. If your LC has been pending for 365 days or your LC and I-140 are approved and the priority date is not current in your category, your employer can apply for a one-year or three-year extension, respectively, and you can return to the U.S. upon approval of the extension.
It sounds like you've already spoken with one or more attorneys to get advice on this - if I'm guesssing wwrong, you definitely should have your situation evaluated by a professional.
1) Yes, as long as you are maintaining status, you can in theory switch to another status for which you are eligible. These might include a B-1/B-2 Visitor visa if you would be staying just to visit, or an F-1 student visa if you would be staying to enroll in a program of study. Both would place severe limitations on your ability to work (you really couldn't at all on the Visitor visa). Both require nonimmigrant intent - contradicted by the pending green card case - so traveling abroad and returning while on either would not be advisable.
The O-1 Extraordinary Ability visa would be more promising, if you qualified for it. It would allow you to continue to work in your current job, and travelling wouldn't be an issue in the same way. But, this is a difficult visa to qualify for - speak with an attorney to be evaluated for this one, if you haven't already. You would need to meet at least three of several permisssable "tests" and be able to document sustained national or international acclaim in your field with letters from others who are very accomplished in your field.
2) Staying out of the U.S. for a full year re-sets the H-1B clock, giving you a full fresh six-year period - but you would neeed to get a new H-1B under the cap (assuming that you are in a cap-subject job). However, you can also do as you suggest - leave earlier than the expiration of your H-1B, reclaim the time later and return, and then get the benefit of the H-1B extensions in excess of six years. Your employer would need to accept your being abroad for the period of time required - you of course know your relationship with your employer better than I, but I would be hesitant to advise you to ask for such accomodation in this economy.
I wish you the best of luck in resolving your situation!