Having served in the military in Canada *thank you* and having worked for the Canadian government may be two very good arguments that you thought you relinquished your U.S. citizenship. As far as the tax forms and he onerous FBAR are concerned if you never filed that paper, I would attach a letter explaining why you didn't file it. I am in your boat in that I had never been told about FBAR at all and had previously been told by the IRS I did not have to file due to not having met the requirement to file. Not knowing that even if you do not meet the requirement to file you must file FBAR in those years your accounts exceeded a 10,000 dollar balance on any day. For me I think there were years when even that requirement was not expected of me. However, at this point the actual rules seem iffy and advice even from tax attorneys and accountants has differed.
I like you am finding the forms themselves extremely confusing. Even contradictory for my situation. I'm not sure if there is anyway to avoid having some one file for you other than doing it yourself which I won't do since I am leery of making a mistake.
I honestly would seek advice even just once from a international tax accountant AND from the IRS tax advocate for your area. The numbers for the advocates are listed on the IRS site *will try to find them for you* I believe you will be fine to file everything, use the reasons in your letter you gave here. Then if I were you I would take formal steps to renounce IF you do not want to be a U.S. citizen going forward.
I wish I could be of more help. Good luck with this situation. We are all in in this maze here together.