Did you contact SAFEA (Foreign Expert Bureau), Gov. org. in the city of your recruiter?
I would phone them, and 'tell and ask' them 'how to.....'
The new passport, waiting for the visa to expire COULD work. It really depends what city and the new employer. I know I left a job and i didnt get all the release letter stuff and still got another visa, but it was a while ago and things change all the time. You will find a way, your just gonna have to go through some bullshit first. Itll be a hassle. I know it sucks dude, but you did the right thing not coming to that crappy situation and getting the Z visa before you came.
Good luck!
Yes A release letter is required. But if you change your passport and IF your passport number changes then you can reapply for a Z visa. But Some countries don't change your passport number.
Next option, If that employer is asking you for money you can go to SAFEA for help.
Some people on this site say that they could change jobs with new Z visa'a anytime, but as I understand the policy, your Z visa is on a PRC computer system that allof China can see. My Gov friend told me this.
So the release letter is best or keep trying.. Maybe a visa agent with Guanxi's can help you, best in Shanghai from what I heard..