Writing Series: Major Rewrites

Writing a novel is hard. Editing a novel is hard. Going back and rewriting a novel? Well, that can be heartbreaking.
When I queried my first novel, the overwhelming response I got back from agents and editors was "not enough conflict." As I looked it over (for the millionth time), and decided that they were all correct, I was faced with a choice: Scrap the novel (except for premise and characters) and rewrite it, or move on to something new.
I chose to work on something new, a much stronger novel with a lot more conflict (I learned from that first one!). But now, as I'm moving on to something new yet again, that old first novel continues to niggle at the back of my mind.
People love the premise.
Your characters are really unique.
But then I respond with, "So. Much. Work." And the little voices die down.
You see, I love that novel. It's my first book child. The thought of ripping it apart and changing it hurts. Part of me can see how much stronger it could be; the other part isn't willing to change it because in the end I might not love it as much.
The decision to rewrite a novel is about taking a risk. Is it really worth it? Will the work pay off? What if I can't actually make it better?
So for me, I have decided to keep that novel in a drawer. If I ever land an agent, I will probably bring it up with her to get an expert opinion on whether or not it's worth the work to revise it. But for now it sits in my computer, patiently waiting for the day when I run out of other ideas and have nothing else to write.
Do you have experience with completely overhauling a novel? Was it good, or bad? What convinced you to do it? I'd love to hear from you.