Hi Nick,
The answer to your question is a definite ‘yes’. Depending on your current facts and circumstances, the details of the offence in which you served time and any previous criminal history in Au or overseas, you may still be successful in being granted Australian Citizenship now or sometime in the future. Just because you spent 8 months in jail does not disqualify you from obtaining Australian citizenship, Australia is a bit more sympathetic than that. The fact that you are still in Au and have not had your permanent visa cancelled is encouraging.