I told my wife exactly what I said
Detach and don't engage in this. She doesn't deserve explanations or detailed conversation until she is actually remorseful. She is only interested in getting information so that she can tailor her denials, find ways to manipulate/control, understand what your strategy is and devise ways she can try to smear you once she starts her campaign with friends/family.
She had looked through my phone.
Unlike her, you weren't unfaithful, haven't lied, aren't being emotionally abusive and don't have anything to hide. However, there are some things you need to safeguard (e.g. conversations with your attorney, financial info, etc.). You'll also want to ensure that she doesn't trace your activity here simply for the reason that this is your safe place to vent, be encouraged and get advice.
my wife left our early morning conversation saying she doesn't trust me now
Blameshifting and a guilt trip. It's all manipulation. Trying all kinds of tactics is going to be the norm for right now.
I can't make her move out.
If she would have accepted your proposal on her own, it would have been a bonus for you and your kids. At least she moved to the basement so there is some degree of space between the two of you.
Once she starts thinking more about the situation, does research and even sees an attorney for herself, you should expect her to try other tactics in an attempt to put you at a disadvantage. As others have suggested, get a VAR now and keep it on you ALWAYS. She only needs to get you to become angry and engage in any form of physical contact once to allege DV.
I am not making any decisions and am just gathering information.
Every betrayed spouse is hit with shock after Dday and each person handles that differently. You have to wrestle with this yourself and you have to move at the speed that you feel comfortable. Each person's ability to work through the cognitive dissonance of finding out their spouse isn't the person they have believed them to be for so many years differs. If you read through the FAQ for Betrayed Spouses (http://www.survivinginfidelity.com/faq_bs.asp), you'll find the 180 which advises detaching. That approach is focused on this end result -- getting the time/space away from the abuse, manipulation and control in order for your mind to clear. That can take some time.
Does anyone feel there is a sense of urgency in moving in that direction immediately?
Set aside the whole issue of shock for a second. You have a core set of needs that should also be your own boundaries -- you need to be loved and respected. Anything less than that is unacceptable and you should be very, very clear about that.
Based on your posts so far, from the moment you discovered the A a little over a month ago, your wife has been lying and manipulating. While she has recently changed her tactics even as recently as 2AM, she continues to lie and manipulate. This is incredibly disrespectful and unloving. Due to this, you should be communicating through words and actions that you won't tolerate this. That includes taking steps towards divorce (remember, you can always slow the process or stop it if things change in the future).
Put shock back into the equation. You need to do the best you can. At an absolute minimum, implement the 180 as it is clear that your wife has been emotionally and psychologically abusing you, so you need to allow yourself to see more clearly what is happening. If you want to give yourself a week until the next MC session to see how things progress, you don't have to rush anything.
My $0.02 would be to use the coming days to get everything in order. Separate finances, work to protect yourself, understand your rights, etc. and sort out what position you would take in terms of a divorce. That way should your wife continue down her lying, denying, manipulating path, you will be able to take quick, decisive action. That could be before or even at the MC session next week.
[This message edited by Crushed7 at 10:27 AM, June 16th (Thursday)]