Special situation, help!!!

I supposed to graduate from my master last May. But for some reason, I didn't finish it on time, probably this May( not sure, I have to check with the university). But my OPT already started from last May and will expire this May. And in the meantime I have been working since January 2006(first CPT, then OPT). Now my boss wants to file H-B1 for me. Since I haven't officially graduate, if my case would be filed, will INS ask for my master degree? Would I be in trouble becasue students should graduate first and then could work using OPT? Can I use my bachelor degree from China to apply for H1-B?
If I apply for other graduate program in other university, will the university check this situation? Will I have problem to get I-20?

SOS, so upset, please please help!! any input appreciated!