That is a tragic story and that reminds me more and more why I am not submitting to my urges to buy a motorcycle while being the father to two young children.
I guess I'm not following your rock bottom and feeling of loss analogy. This happened to your Ws friend not your W. Your W has felt zero loss. After everything she has done to you and your children, you can't muster up the strength to tell her she can't keep her horse at your house.
Right now she gets to run around with other men, see her horse and her children whenever she wants and knows you'll be waiting there with open arms if she so chooses to stop. I know you do a lot of research on this board to help in your situation. I suggest you start reading up on attraction. Why your w is attracted to men she can't have her way with.