It is a participle of verb "утопать", which has a direct meaning "to sink, to drown", but it is used mostly in indirect sense. Google translates it as "wallow".
Yes, to use "жить" is a good way too. For example "Жить во лжи - себя губить" that means "To live in lie is to ruin oneself" and looks much more like a Russian aphorism. Though "жертвовать" will never work here as there is no way in Russian to give a negative sense to the phrase "жертвовать собой". In Russian "жертвовать собой" means only "to be a hero".