Well, let's start off with your choice of talents. You did not pick up Sanctified Wrath, which is a big no-no. Hammer of Wrath does a huge chunk of damage for us once a boss hits <20% HP, so you want to get the crit chance up on that. Plus, it lowers the CD on Avenging Wrath, which is awesome as well. I'd take two points out of Eye for an Eye (I don't know why so many PvE Rets get this talent, it's mainly PvP) and pick up Sanctified Wrath instead. Vindication is also kind of meh. It's nice while soloing and for trash, but bosses are immune to it. I run scrolling combat text, so I got sick of "Immune" constantly popping up while I was fighting bosses, so I don't bother taking it anymore. There's not a whole lot more in the tree to spend on to up DPS, so I went with Pursuit of Justice for the movement speed bonus, helps when I need to chase down an errant mob heading towards a healer. This one is more for flavour so leave it if you want, but definitely change EfaE with SW.
As for gear, you're doing fairly well. Next time you're on, check the AH and see if you can find a BoE blue named "Cloak of the Bloodied Waters". It has 60 strength, which gives us more AP than any of the purple cloaks that have 112 AP. I've passed on a number of purple cloaks and am still using that one. For the chest piece, you might want to look into getting the plate one from normal Oculus or the one from Heroic AK. Also, get the plate boots from Knights of the Ebon Blade. You need exalted for that, but they're well worth it. Also, try to pick up a Mirror of Truth (40 Emblems of Heroism), it's a lot better than that Heroism trinket you have.
For gemming, you pretty much won't want to gem for anything but strength. You'll want the +16 str ones (Bold Scarlet Ruby), and I see you have a tear in your helm. The Titansteel gem bonus (crit rating) is not as good as the one from your T7 shoulders, so you'll probably want to put the str one in there and the tear in your shoulders.
In all honesty, being hit capped is not that important for Ret as of right now (that changes somewhat in 3.1). I only have around 180 or so hit rating, and in 5-man heroics I can usually pull around 2800-3000 DPS. Part of that is that I have the 4pcT7 bonus, which gives us a huge increase in DPS because so much of our damage comes from our judgements. Also, what is your "rotation"? You should be using a First Come, First Serve (FCFS) type rotation. This means that you start off with what could be called a rotation, then when 2 skills come off CD at the same time you prioritise the one that does more damage first.
Judgement > Hammer of Wrath (when <20%) > CS > DS > Consecrate > Exorcism > Holy Wrath
This can vary as well. On trash pulls or ones with lots of mobs, you may want to prioritise Cons over CS and DS. As for me, I don't have the libram from Naxx yet (I have not seen it drop ever yet *sigh*) so I'm still using the DS one from Venture Co., hence for my personal rotation I put DS in front of CS for the increased crit chance for CS.
Are you using Seal of Blood? (The answer should be yes.) What glyphs are you using? You should also always be buffing yourself with BoM if you're the only Paladin around, it gives you much more AP than Kings. If you're curious at all, here's my Armory for you to take a look at:
Mugen of Turalyon.