Alottolose,
I apologize if I am repeating. In a hurry and don't have time right now to read all of the posts.
I'm going to be as gently forthright as I know how.
Your post screams control. It seems like you are under the false impression that anything you do has any control over what your STBXH is going to do.
He said it himself, he wants out. He is basically going to become a bigger and bigger jerk, emotionally abusing you, until he breaks you. All because he selfishly doesn't want to look like the jerk he is. If you do nothing, you will be letting him abuse you, and you will regret doing nothing.
NOTHING you say or do is going to KEEP him at this point.
However, you CAN push him real effing hard off the cake eating fence.
You have all the control in the world over your own actions.
At this point, you need to HARD 180 and NC if the situation dictates. If it were me, I would Hefty bag his shit, toss it out the door, and tell him if he wants to come home, HE will have to do the hard work (oh, wait, I did do that). Far be it for you to keep him from his "true lurve" and "true happiness". He needs to see what it is like for him not to have you. He has been cake eating too damn long.
Will he go to the OW? Very likely. Sounds like he is already mostly there anyway.
You can give him the option of coming home, but set your requirements for R first.
It might seem like you don't have the strength, but you do. You have to start putting you and your needs first. He has been out of the M for a while.
If he really was planning to leave, would he have done it already?
Honey, gently, ok. He has already left the M. He is just continuing to abuse you so YOU will be the bad guy and kick him out. Personally, you should give him exactly what he wants. No matter what happens, he is preparing to leave. Regardless of whether you kick him out or not, he is going to paint you as the bad guy. Be prepared for the demonization to commence one way or the other.
Go see a lawyer, get an STD check, and make appointments for you and your precious darlings to see an IC. Close out all credit cards with both names, get your own checking and savings account if you haven't already. Move half the money to one of the accounts in your own name. Use marital asset money for the attorney. You don't have to file for D, but strongly consider it.
Pull credit reports.
If the retainer is $3500, give them $4500 in case the D proceedings do go forth and in case he acts an ass.
If you want to confront him, then do so. However, do NOT tell him how you got your information. Hold ALL of your cards close to your chest.
And remember this too, NONE of this is your fault. There was NOTHING you could have said or done differently to prevent the A or the DDs. N.O.T.H.I.N.G!!! Now the only thing you can do is do for yourself and your kids.