Pook, I have read the last few pages of the posts here.
While I don't consider myself a vet I did see some things in your posts. Your W did state she feels you are smothering her. I know your still living together and I'm sure it's hard to have NC with her.
Until you move out I would suggest that you tell your W that you are going out and she needs to take responsiblity for the dogs, house ....whatever needs to be taken care of.
If she brings up any talk of future events pertaining to the two of you, you need to state you will not be apart of it. She said you two weren't a couple. So don't do couple things.
Start looking for places to live. Your home life is toxic.
My thoughts on the Mr Z. situation is what reputation are you protecting?? If you confront the situation how is that bad for you?? As I see it you are a man with morals and won't tolerate infidility with your W. Not to mention if the two of them are having an A, what's the code of conduct from your employer?
Start living life for you, don't worry about W. GAL. Hope you casn get somethign from this. gr8
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