Many folks have overcome this to get a major and even legacy job.

But a common theme is time passed... understandably any potential employer will want to know that a lesson was learned, and going some period of time without any sort of problems is the best way to demonstrate that.

As for upgrade... more experience, including TPIC and check airman will enhance your resume for most majors. While I think it's safe to say that you won't be getting any calls in the next couple years, you might want to go ahead and start building career-enhancing experience now. You could defer upgrade for a little while until your CA seniority would be somewhat better, but I wouldn't wait too long. The hiring wave will not last forever and that will probably work in your favor.

Also I'd keep your apps updated at any second-tier or ULCC which you'd be willing to work for... they might possibly be willing to hire you sooner than expected, simply because they know you won't be bailing for DL any time soon.

Getting over this is probably going to take some career aggressiveness.