Wow! That is truly a difficult situation. From what I can gather, it's a lopsided relationship with you giving more than she is. (you do the cooking, cleaning, shopping etc). That can often lead to resentment, which sounds like what is happening. Then there are the issues of her not necessarily being enjoyable to be around. Your description of her sucking the life out of an event was a perfect word picture.

Yet, you have married her and are helping to raise young children together, which is a significant commitment.

So, these are the things that come to mind.

You can ask/strongly recommend that she get couseling. If you think she might be resistant, you can make your appeal based on the fact that she has such a challenging family and you want her to learn how to deal with them better. You hate seeing her so upset by their actions/antics, etc. The therapy may indeed help with that aspect of her life, which would probably translate into a better mood, and a good T would also look at other aspects of her life including your marriage.

You can suggest that you both go for marital counseling.

You can resign yourself to the fact that she is a less than perfect wife and focus on her good qualities, while ignoring the other things that could make you crazy. This is naturally much easier to say than it is to do.

You can make a new friend or have an affair who would be emotionaly fulfilling, so that you didn't mind her less than loving treatment of you. Going the affair route has lots of other consequences ... what would she do if she found out? How would you feel about yourself? ... but it is an option.

You can try a separation to see if you really want to be without her and the kids. You may decide that you miss the kids so much that you'll put up with her just to have them in your life.

You can get divorced and focus on finding another woman that you are more compatible with. I'd suggest you get a bit of counseling first if you choose this option, since you said "I had doubts all along...but always told myself things would get better soon." I don't suggest the counseling b/c you had doubts, but b/c you had them strongly and didn't listen to them. Did you not feel like you could find a more suitable match? Did you feel unworthy? Were you aware of settling for secondbest? These types of self esteem issues interfere with relationships and, depending on the source of the self exteem, can often be addressed fairly quickly with counseling.

Best of luck to you no matter what you decide.
Bub