You left out another option:
3) you update your methods for understanding the text, instead of relying on methods developed in the early 1900s [0]. Figure out what concept the original writing was really trying to communicate by studying the history of the origin of the text, the culture and surrounding cultures, etc. Recognize that certain things you take literally might potentially be part of some sort of metaphor or cultural reference which would be obvious to original readers but easily missed by modern ones. This method is called "Higher criticism" [1]. (Sometimes what "makes us look dumb" is reading ancient books without any historical insight, and expecting to understand them perfectly.)
In this specific case, you'll find something simple and enlightening: the Genesis creation account is a monotheistic response to the polytheistic Egyptian creation account [2]. It uses essentially the same style of storytelling and language of creation as the older Egyptian accounts, referring to many of the same types of events, but in ways that are insulting to the Egyptian pantheon. Ancient readers would not have necessarily viewed it as giving a timeline for creation, but rather as describing the relation of objects they could see to the divine. The Egyptian account describes some objects as divine (like the sun, moon, and certain bodies of water); the Genesis account describes the same objects as physical objects created by an unseen divine being (the sun and moon aren't even named; they're referred to as mere "lights".) The Egyptian account refers to gods of specific realms like day, night, and water; the Genesis account establishes a single God with power simultaneously in all realms. It should not be surprising that the first pages of the central text of a major monotheistic religion would be about there being One God rather than about how long the creation process was.
By the way, this is not at all a new viewpoint. I've seen it expressed by 2nd and 3rd century Christian scholars like Irenaeus and Origen [3].
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[0] Christian Fundamentalism was founded around the start of WWI. See http://en.wikipedia.org/wiki/The_Fundamentals
[1] http://en.wikipedia.org/wiki/Historical_criticism
[2] http://www.theologywebsite.com/etext/egypt/creation.shtml - not necessarily the most ancient version, but it gets the point across
[3] "Now who is there, pray, possessed of understanding, that will regard the statement as appropriate, that the first day, and the second, and the third, in which also both evening and morning are mentioned, existed without sun, and moon, and stars—the first day even without a sky? And who is found so ignorant as to suppose that God, as if He had been a husbandman, planted trees in paradise, in Eden towards the east, and a tree of life in it, i.e., a visible and palpable tree of wood, so that anyone eating of it with bodily teeth should obtain life, and, eating again of another tree, should come to the knowledge of good and evil? No one, I think, can doubt that the statement that God walked in the afternoon in paradise, and that Adam lay hid under a tree, is related figuratively in Scripture, that some mystical meaning may be indicated by it." - http://www.ccel.org/ccel/schaff/anf04.vi.v.v.i.html section 16