Ok about the ultimatum progression....a friend of mine did such a better job than I did (but I didn't meet her before my sitch!) Here is how she handled it:
-confronted her H about what she suspected (she had no hard core evidence even) -her H admitted he was "falling in love" with OW -she asked him if he was planning on divorcing her and the kids -He said they hadn't thought that far ahead -she told him that if he wanted to be with her then she and the kids would be fine- she would make sure he got to see them but she would move to her parents' town, go back to teaching, and would work on finding a good stepfather for them -He asked how often he would see the kids -She said like every other divorced dad- every other weekend (at this point his eyes were open wide)
She hopped in the car, took the kids, and drove to her parents house to spend the night. When she returned the next day she didn't bring it up to him until after he came from work. Then she asked him what he decided. He agreed to end it and did.