You've been at it for 8 months and you still don't have a good grasp of what's going on. The other joins later takes the time to learn and decides that you are not up to snuff. In fact, you are admitting that you are up to snuff.
It's good that you're working hard now to get up to snuff and it's about time you did. The question is, why couldn't you do earlier what you are doing now, given that you have the same set of constraints on your time that you had earlier? It's going to take some time before you get to the level that the new guy is at, and I assume that if he could do it, you can do it.
Just cut out the excuses and do what you have to do to get yourself up to speed. As for the negative commentary you're getting, you'll have to live with it until you know what you are supposed to know. In your quest to get yourself up to speed, eat your pride and use the new guy's documentation and pick his brains if you have to - Be careful about how you go ahead and ask him, because he can use anything you say against you. It took a while for this situation to build up and it's going to take a while before this situation dies down.
Follow-up comment from nysa "The reason i was not upto snuff was because i had too much work on my plate. The new guy only has a ramp up time for now with little to no assignments since 2 months. Whereas i had to join in the project at a time where deadlines were already in place and there was a lot to do. Not that i did not do my own homework, i did as much as possible. Also, as i was a consultant (a temporary hire, my priority post 5 months on this job, was to find another job as my contract was ending). Later i got an offer from the same team to join them as a permanant employee. It is then that my priorities changed"
You set your own priorities. You made your own choices. You paid the price. I have no sympathy for your plight since you made your choices as an adult, with your eyes open. Just buckle down, cut the excuses, and get up to speed. Right now, everybody's perception is that the new guy was able to do in two months what you were not able to do in EIGHT months. The question is, how many more months do you want to get yourself up to speed?
Follow-up comment from @nysa "u r right. whats wrong is wrong. facts are facts. i know my priorities were different. but now looks like if i don't buckle down, i will never gain the respect. just that until that time, i will have to go through hell"
it's hell when it's hopeless. As long as you're determined to turn this situation around, you'll get better and better and you'll be a moving target. It's not a comfortable situation, but you'll get through this and put this episode behind you
Follow-up comment from @nysa "Any advice on what my approach should be on: 1) updating my gaps 2) dealing with colleagues that now have an opinion about me 3) analyzing where i can add more value"
If you are out of ideas on updating your gaps, follow the new guy's recipe. Use his documentation. If you have any question about it, ask him. If he asks why you are reading his documentation, play it cool and tell him that you are reviewing it. In point of fact, you are reviewing it;
roll with the punches and accept their opinion for the time being. Eventually, the impact of your self-improvement should kick in, at which time, you'll be able to claim that you got distracted without your claim looking like an excuse;
Your brains are in working order. Use them. Seriously.