I thank you all again for the heartwarming responses. I would be lying if I said I would have thought so many people would see my side of this and agree (and show tolerance). Definitely wasn't expecting a response like Hamster's... while I think your view of her may be a little harsh (and maybe that has to do with the way I tell the story and present the details), there are times that I do think exactly what you said. She really is a good person, but whatever she's going through right now has turned her into someone I don't particularly care for.
And Jannaku... over the past few days I have been coming to the conclusion that you did (see my mid-life crisis comments earlier) that this may not really be about the crossdressing completely. I think it's a combination of OCD, disappointment, grass-is-greener, etc. and using this is a way of putting it all on me. She does frequently remind me during heated discussions that we are "here because of you". The next time that is said, I will be prepared to turn that around on her and remind her that
"NO... we are here because you want to give up on me, because everything I've ever done for you and provided for you is no longer good enough for you, and because you don't appreciate or respect me... you're also about to make a decision that will cost you the love of someone that cares deeply about you and has and will continue to do everything in the world he can to make you happy... you're about to make a decision that will affect your children for the rest of their lives ... all because of something that most people would say is not that big of a deal, something that I promised you I would not do anymore, and something that I have apologized for, attended counseling for, and spent 5 years doing everything I can to make it up to you. " (cue up Aretha Franklin's "You better THINK ... THINK... think about what you trying to do to me!! "
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As I said before, the timing is not perfect right now, I need to see how some things are going to play out, plus she has a surgery coming up and a grandmother living out her final days right now. But you guys have definitely empowered me and giving me good ammunition.
I'm done begging for my life right now and my patience for pulling the trigger is very thin. I am not one that takes a hard stance often, I am very low maintenance, all I ask for is respect, affection, and a Thank You now and then. But this is one scenario that I am ready to fight... I will not live under those circumstances, and I will put the best interests of my children first. I am trying to schedule a consultation with an attorney for next week just to get my ducks in a row and be prepared.
Jannaku, thanks for the comments on the 6 week thing. I don't know if she'll go for it or not... if she says no, make it official, then I guess I get my answer. If she says yes (or better yet, NO, let's try to work this out) then I know I still have something to fight for.
Again... shocked by the tolerance toward the crossdressing though. Having spent most of my life hiding it and feeling ashamed and feeling like a freak, I have to say this is pretty liberating. Just wonder how many of you might have reacted the same way as her though if you were in her shoes...

Outside looking in is always a different view. I have lots of questions about how this might play out in future relationships if we get to that point... but I'll save those for another discussion.