From what i can understand.. Your ligaments and bones are fine which is good news but your menisci and cartilage are severely damaged. You were probably physically active which is why this has happened. I don't know if any other surgery will do you any good. What i can say is, stick with physical therapy and you might have to take injections on your knee. I don't think these things are curable. A specialist can tell you better.
Well, your MRI shows evidence of degeneration or severe damage to the menisci and the lining cartilage of the bones that form the knee joint. The menisci are fibrocartilaginous semicircular structures located one on either side, that help to decrease the contact area between the bones; thus reducing friction and serve as ‘shock absorbers’, aiding in smooth movements. This is also thickening of the synovium (inner fibrous covering of the knee joint), that is associated with long standing/ chronic infection/ inflammations. You may like to consult your orthopedician for possible management options.
Hope this was helpful.