I just read your thread today. It sounds as if you are doing a good job dbing. Dealing with PTS makes your sitch a little harder. I wouldn't go for any LTRs just yet. It sounds as if H is making good progress, as best as he can with where he is mentally right now. Your efforts will start to pay off, it just requires some faith and patience. Ok, alot of faith and patience!
OW does not sound like a threat at all. I wish my H's OW would screw up that badly. I wouldn't look at you H looking after her kids as totally bad or inappropriate. In some ways, it shows that your H is still connecting emotionally to others. I would acknowledge his concern for the kids while ignoring what OW is doing.
Focus all of your attention on dbing well and changing things for you for the better.
Feel free to check out my thread. It's called help with depressed spouse. My H had a breakdown last fall that lead to our separation and we've been working on our M ever since. I might be able to help out with resources for depression and such.
