From your post, I'm guessing you're fairly young, teenager? If you are a teenager and still living at home, then I wouldn't be too worried about the issues with your father. Honestly, they're probably just teenage rebellion, trying to figure out who you are as a separate identity from your parents and preparing to leave the nest.

Also, if you and your best friend are younger, then I find it very odd that your instructor would be so open and honest with your friend. I don't find that the least bit professional, and I wouldn't be jealous of it (though I can understand why you are).

Also, people do change a lot as they begin to figure out who they are. Perhaps it is time to simply let your friendship dwindle and find new people that fit more along the lines with the values, etc., that you hold important. I know making new friends can be extremely daunting, but the rewards can be worth the work 10 times over. Perhaps in your karate classes, at school, or even another interest of yours (perhaps someone who is also into Lord of the Rings or reading in general).

Oh, and while we're on the topic of Lord of the Rings... I wouldn't be too worried unless it starts affecting your ability to live your life. Have you seen the Harry Potter craze or the vampire fad? I've known more people who cried over the end of Harry Potter than I care to admit. Besides, there is nothing wrong with escaping the real world for short periods of time. Why else would their be novels and movies and endless amounts of television? If it gets to the point where you are neglecting responsibilities, then it is a problem.

Lastly, I can kind of understand you issues with working really hard in karate and never feeling like you're quite there. I took pre-professional ballet for many years. I was one of the only ones that actually wanted to be a dancer, but I was also wasn't very good at it, and I knew it. I had decent technique, but no confidence in my abilities, not to mention I've never be flexible. But looking back on it, I think the big problem was my confidence. I had to be willing to take risks, make mistakes, and do it all for me. Not for anyone else. I understand wanting to be the darling of the teacher, but the best thing to do is work on your abilities for yourself, not to please anyone else. Otherwise, you will end up burning yourself out (like I did), and maybe desert something you truly love.

I hope this is helpful. I apologize if I insulted you by asking if you were on the younger side. Good luck!