I was induced with GD too, and like you I wanted a home birth.
I totally agree with everyone when they say it's your body and you make the decisions - and the continuous monitoring is definitely something to get out of if poss. However my psychological makeup seems to make me do whatever anyone tells me to when I'm feeling vulnerable (pathetic I know) so here are some tips if you're at all similar:
There is plenty of time to 'mourn' the homebirth afterwards but don't do it while you're in hospital; it's unproductive. This task is down to you and DD and whatever medical intervention happens, it's about the two of you.
Even if you end up being monitored continuously and have a drip, you can sit on the birthing ball and bounce.
You won't necessarily need an epidural - I didn't and I'm pretty sure I don't have a high pain threshold!
Bring an ipod or something. Then if you are in the early stages of labour in the night you can retreat into your own world and block out all the hospital noises you get.
Ask them what they are doing and why. I find this helps me to panic less.
As someone else said, ask them to dim the lights as it really helped me relax.
I hope that helps a bit. Good luck with it. I know there are a lot of scary stories about induction but honestly, mine was ok.