Is it common to have severe emotional problems after a breast reduction (hormone imbalance)?

I am sorry to hear about the "depression" you are experiencing.Yes, significant “emotional” swings are quite commonly encountered after all types of elective surgery.   The specific cause of the  "postoperative depression" is not known;  in my opinion, it is probably multifactorial ( factors such as stress, pain, unanticipated length of recovery, being away from usually enjoyed activities/people…).
 I suggest that patients do their best to occupy your mind with activities that they enjoy. For example, for our patients experiencing these types of post operative “sadness”, I suggest they walk outdoors (fresh air), see movies, read books they enjoy, seek family/friends' support… 
 Requiring reassurance (that what you are experiencing is normal) is also common and to be expected. I would suggest closer follow-up with your surgeon–call and request earlier follow if needed. Hopefully, after follow-up with your surgeon you will find that the "depression" will improve. Usually this occurs as patients become more active and return to their previous activities/lifestyle.  Keep in mind that the worst part of the recovery is over (and you have yet to enjoy the outcome of the procedure performed)!
Best wishes.