Wow BamBam - I am also so impressed with how you handle some of these "sticky" situations. You handled the OW's sister with honesty and without anger...it was perfect.
I can completely relate to what you H is doing with the kids. My XH still pulls some of the same garbage. IMO, he is just trying to make you out to be the bad guy when it is convienient for him because it helps him handle his guilt. We all know that if he wanted to be with the kids, he could and would be. Seems like he is in the crazy/selfish phase of this so, maybe it isn't a good time yet for you to try to reach out to him...or if you do, do it with ZERO expectations (I know, easier said than done).
