Hi Deb
I think there are a lot of people in a similar situation! I've had that dreaded morning feeling too, as well as waking in the early hours with it. Whilst I haven't been sick, I've certainly felt rubbish and hopeless with it!
From what I've learnt, the 'morning feeling' is likely to be caused by the fact that the morning represents a new day - a new day in which you are still suffering from this 'dreaded thing', when you had hoped it would be 'gone'. So, your reaction is one of disappointment and fear, because you presume your entire day is going to be 'miserable' and similar to the previous bad experiences you have had with panic/anxiety.
The number one bugbear of mine with anxiety was the CONSTANT niggle of 'something' - even if I wasn't conscious of breathing, or having a panic attack, the constant 'feeling' in my stomach/chest was there - the one of "something isn't right heerreee.. don't ignore me.. who knows what I'll turn into?"
The key thing to learn when overcoming anxiety/panic is to not be afraid of panic. Just like M155anthr0p3 said, its the fear of panic and it's symptoms that causes it!! very ironic. You can discuss various symptoms til the cows come home, but its very unlikely you'll experience relief from them until you can band them ALL under the umbrella of anxiety - you'll learn to identify the "Tap" instead of looking at the various bits of water in attempt to understand why you feel the way you do.
I used to focus on things like, WHY is my breathing weird - why am I always aware of it, why do have to keep taking deep breaths etc - and whilst reading about others experiences, learning 'belly breathing' and everything helped somewhat - it still unnerved me that it was THERE. But then I learnt (from a couple of website sources) that me being anxious about the breathing is what caused it. Once i stopped using the 'safety' behaviours of trying to take a deep breath, sitting down, drinking a glass of water etc, I learnt that the 'breathing thing' wasn't going to cause me any harm so i lost my fear of it (gradually) and it no longer happens because i'm not scared of it. Once or twice it has come back - but now I know what it is, so I don't mind and quickly get over it because I understand instead of fear.
One fantastic source for CBT is the website
http://www.nomorepanic.co.uk/showthread.php?t=91696 < Please use the link to the appropriate thread on No More Panic.
It was recommended on here a couple of days a go, it is a brilliant learning tool for understanding anxiety and thus helping you to lose your fear of it. I can honestly say it has really helped me, I've had the calmest two days in over a year!! And this is with me running a busy clinic this morning (I am a third year student midwife, with a dissertation to complete also lol)
In overcoming panic you learn to 'live in the moment' - a valuable tool for life in general. Waking with panic/dread are symptoms of worrying about what is going to happen in the future, which takes you away from the present moment. When you overcome this, you'll see that living life in the moment is much more rewarding
Best of luck, feel free to PM me for any support