Don't give up hope. I had something important show up after missing for two months.

In any event, file a search with the USPS Mail Recovery Center; perhaps the passport and envelope got separated:

https://www.usps.com/help/missing-mail.htm

It looks like U.S. passports found loose in the mail are automatically returned to the State Department, but whether that includes cancelled passports I don't know. In any event, you might want to contact the State Department as well. Do a Google search for an office there called CLASP.