Andrew, can you really accept her friendship with this man? Really think about this, and draw the line if you have to...but not quite yet. You've got to give her a little longer to get past her feelings. It took my H about five months after they had ended their R. When there is an EA, it's a lot tougher to let go. It's a slow process...and not a fun one to go through, but if you care about your M and your W, you can do it.
My H pretended he had ended all contact with the OW, but he continued contacting her. At least your W is being honest. And I do think she's seeking attention from you, trying to get a reaction. Don't fall into it.
The book says that as long as your S is not pulling away, and you still have the strength to continue, you should keep DBing. As you make more progress, you have to reassess your goals (remember the short vs. long-term goals?) I would start thinking about my goals now and be prepared for when the time comes.
