OP,

You have done well. There are a few important points however. It is true that the distortion of the shape of the Earth by the gravity of the Moon is at its greatest where there is liquid, specifically the oceans. However, the Earth's crust also bulges as it rotates under the Moon.

Now, a very important point is that the bulge cannot form instantly and it certainly cannot subside instantly. Because the Earth rotates faster than the Moon revolves around us, this means that as the bulge subsides it is no longer beneath the moon, but leading it. It sticks out from the Earth (very, very slightly, to be sure) like a mass held in front of the Moon, and a mass held in front of the Moon must attract the Moon. And attracting the Moon from the front speeds up its motion in orbit.

Note that although the bulge is very slight, the tidal effect between two masses is proportional to the third power of the distance between them (other things being equal) and this means that remarkably small differences in distance can have a drastic tidal effects. Physicists are fond of pointing out things such as that your morning plate of cereal has a stronger tidal effect on you than the Moon, even though the Moon is dramatically more massive.

Very well, that is point one. The rotating Earth keeps holding out a mass that accelerate the Moon in its orbit.

Another important point: accelerating the Moon in its orbit has an apparently paradoxical effect on its motion. It is easy to see that the acceleration causes the Moon's orbit to widen. But here we find a confusing effect: widening its orbit slows the Moon in its orbit. (If it did not, then we would have an example where energy is not conserved, because a higher speed in a more distant orbit leads to a still more distant orbit and a more distant orbit requires more energy. However no one has yet found any way around the principle of energy-and-mass conservation, and this is yet another example of how well that conservation principle works.)

Now, accelerating the Moon in its orbit requires more energy. This energy can only come at the cost of some other source of energy. In this case it comes from the kinetic energy stored in the rotation of the Earth. Once that has been used up, there will be no more rotation to continue accelerating the Moon. At that point the Earth would keep the same face to the Moon permanently, just as the Moon already has kept the same face to the Earth for a long time now. As you can see, there is no question of the Moon even approaching escape velocity by these means. Long before that could happen the Earth would be rotating more slowly than the Moon's orbital period, and then it would be decelerating the Moon in its orbit, causing it to orbit more closely, and more quickly.

As always, if that did not help, please ask.