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My counselor (he was a marriage counselor first and then my personal counselor) had suggested that I should have initiated a separation when my marriage hit the first big issue - xH's first EA - and xH did not respond to my concerns. His opinion was that I did all I could and xH did not see how serious his actions were in the context of my feelings and our marriage. I told him that I understood what he was saying but that I had no context at that time for separation being anything other leading to divorce.

Interesting. I think the operative words in that paragraph though are "xH did not respond to my concerns." The C was probably taking the view that you had tried everything within the M to try and make it work and since your ex did not respond, take a last step- Separation- and see if that gets through to him.
It's always a gamble, depending on the will of the other person to change.
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I wondered if separation could actually save many more marriages if it wasn't seen as the end of the marriage.

I think it would, having had personal experience with this issue. But most people see it as the final nail in the coffin. I think it depends a lot on the attitude of the person doing the leaving. I vividly remember my H walking into the bedroom with trashbags to put his clothes in for the move. I asked him why he didn't use a suitcase and he said something like "that just seems too final" or something like that. It was as if in his mind he knew the S was just a short-term solution to our M problems. Not that I knew it of course. I freaked. I'm the one who actually initiated the whole S agreement. He seemed to have no interest in making anything "officially over." That probably was a great clue that the M was very salvageable.
Other people might see themselves in similar situations right now so hope that helps.
By the way, here's an intereesting FOO tidbit that you probably don't know - my parents were S for EIGHT years and got back together. So it is very possible to save a M from S, even after many many years.
Obviously I come from "will not say die" stock. Nature vs. Nurture debate I guess. Was it learned or was it in my "blood." ;\)