Oh boy, that's a very complicated situation!

My guess is that the avoidance is directly related to the fact that she is having an affair and that the three of you work together. Your knowledge is dangerous to her and to her affair partner.

As far as handling the whole scenario... it sounds like she is distancing herself. I don't really have any ideas about how you can stop that from happening given the dramatic dynamics, but maybe someone else will. Would you be okay with letting this friendship go?