There is no way I can tell you what to do but I think #2 with a touch of friendiness (a term coined by SP referring to a sort of watered down version of friendly)...
#3 Seems a bit unrealistic but some here go for it. You need your mental health in tact and the OM thing is pretty brutal. Maybe check out some other threads where OM is involved.
#1 would not mean it is over, it would just mean that you are not willing to share your wife and you are cutting her lose to do get what she says she wants. I understand you giving it more time given the part you've played but it may actually turn out to be the best move.
