The two situations might be related? Maybe because your standard is slipping is the reason your hours are dropping.

I would personally discuss it with my manager just to find out where I stood. If you admit that your work has slipped, explain how you feel, but then say that you want to improve and learn, then I think you've handled the situation pretty maturely.

The last option you should consider is leaving. Jobs are scarce out there, and it seems like the easy option. Battle it head on, and you'll feel far more accomplishment by turning it round than you ever will by quitting. Quitting is a bad habit to get into.