I dont think you are over-reacting at all! Having to do something to alter our appearance, in a way we feel will not be an improvement, is stressful for anyone! I am just learning what traits I always thought were my personality are just manifestations of this disorder, but from what I have read, its obvious my self-judging is at least influenced by it. So, it follows that things like our hair- "a woman's crowning glory"- would be something that having to change drastically would cause us special stress.
Have you done it yet? How did it turn out? If you haven't and can possibly afford it, ask someone you think has great hair who does theirs and make an appt with that hair dresser. Hope you are feeling better.