I am starting to wonder if, for my sanity, it may be best for him to find another place if he needs to continue his erratic, unpredictable schedule for staying out.
Even those of us who didn't want to separate found it a blessing once we did. It's a tough adjustment at first because you do feel very lonely, especially the first time your kids stay with your spouse. But you get used to it and you'll find your stress levels go way down when you're not having to deal with the alien all the time, and when you don't feel like you have to constantly walk on eggshells.
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Am I hurting chances for reconciliation by suggesting this to him?
No, at this point the recon chances are so far down the road that there's not much you can do right now to help or hurt them.