Maybe it's time to shake things up a little. Sometimes if something isn't working that you have been trying. Then try something else. What more could you have to lose at this point? If your at the end of your rope maybe it's time to tell her that. Maybe you two could try counseling?
I am curious has she said what she will tell the children? This always makes me the saddest. As a parent how could you chance losing respect from your children. They will look down on her as a mom. I am sure they will never want ole sweaty in their life. ICK!