WP this is a tough situation and my heart goes out to you for the way it must have felt coming to that realization that you were holding onto the hope that much still. I think what has complicated all of it for you is that you have gotten along with her regarding the children from what you say, and so that probably has led you to continually think in the back of your mind that she might just come around. After all, if she could negotiate this relationship with you over the kids, why not more, eventually?
I agree with the other posters that her reaction and affection is just something that comes out of your handling things ok, but it's not a sign of hope that she is moving towards you (I think you realize that anyway but it must be hard to be on the receiving end of that embrace--I remember distinctly a hug my XH gave me when we finally "got along" and even though it seemed like a normal hug I kind of knew that there was more emotion behind my end of the embrace than his, which is kind of a sick feeling).
I think what you need to do is look on this as an opportunity to fix something/heal something in yourself that has gone unhealed so far. Like the others say, you're not detached, and you were really holding on. Your lack of interest in dating or I guess even meeting someone who might potentially be someone you'd date is evidence of that. And you have to ask yourself how long are you going to "wait."
By no means am I saying go start dating tomorrow. And I'm very certain that a person can be very happy as a single person and not really have much interest in dating or a relationship unless it's the right one. I went through a period of dating and finally came to the conclusion that I know what I want now more than ever, and I'm not willing to settle for anything less, and that I'm just going to enjoy my life and if the right person crosses my path, I'll seize the opportunity, but otherwise I'm just chilling out being single :-) But I suspect that you can't say that--the "right" person to you is probably HER and only her at this point.
I could be very wrong about what I'm about to say but it's worth a shot--and this comes from my own experience and from watching some other people's experiences on this board, and it's that I wonder about your self-esteem and your feelings of self-worth, specifically in regards to your "relationship self-worth." (meaning you may have amazing self-esteem in other areas of your life, but do you in terms of relationships?)
What I mean is that she sounds still so far out in MLC land, esp. with the new relationship, that essentially by holding onto hope that you reconcile with her you're showing that you would accept a relationship with someone who is not healthy emotionally just because it's her, just because it's familiar. It's like saying "I'm not worth a relationship with a stable person."
Granted, if down the road she does a 180 and really, truly comes out of this MLC, and she becomes a loving, stable person, she might be a good partner again. But she's not right now, and new guy is getting something pretty damaged.
You don't want damaged. I mean, YOU DO, because it's what you know, and it's your comfort zone. Better the devil you know, right? But in all honesty you have to look at yourself and say "I'm worth more than that. I don't want damaged. I want better for myself."
I am not dating anyone right now, but I did meet someone recently who is such a ray of sunshine and so stable that regardless of whether I ever get into a relationship with him, he taught me that there are people out there who are not a mess. It has taken me several years now to understand that I am worth more than waiting around for a person who is still a mess to "choose" me again.
I think the best thing you can do for yourself right now is to work on your self-worth, to realize that you detaching more from her will only make you stronger. It's painful but necessary, and given what you've dealt with to this point, you're capable of further growth.
M45 Bomb 6/09; EA 6/10; Divorced 1/11 Proud single mom of 7 little feline girls and one little feline boy "Fall down 53 times. Get up 54." -- Zen saying