Re: She says she "lost herself"
Confu?ed - Dude. I feel you. I was married 6 years (w no kids) and when my XW had an affair last summer I walked out hard. I gave her several chances (a few too many) to come clean and explain herself, and she NEVER gave me one thing that I didn't know on my own already. She denied and lied when I'd confront her (even told me "maybe I shouldn't trust her anymore", but then followed it up with a lie - "I would never cheat on you! I'd tell if you if I was going to"). And only when I found details out on my own (through texts/emails, etc) did she give in and admit them. And then it was ONLY those details. I finally had enough that I was sick to my stomach enough to let her have it.
It wasn't easy then, it's not easy now. But the anger goes away, trust me. The pain I feel now is mainly feeling sorry for her, because even though she never really showed remorse for her actions, she has shown me through actions lately that she knows she deserves what came down on her. Financial mess, and shame from family/friends, to be exact.
I've moved on and found so many things to be happy about as a result of giving her the big D. If your W is playing these kinds of games with you, she has no respect for you. And now it's up to you to do what you have to in order to create that respect for yourself - it will come from her later, and perhaps in time to save the marriage, but I feel my situation was very akin to your current one. So I don't want to sugar coat anything. She is in love with the other guy. She is most likely WRONG, but that's how she feels, and the fact of the matter is that she believes it.
If she wants to stay with you, either she or OM must quit their job. If not, I'd recommend YOU find other work, because you will not want to work with your stbxw and her new d-bag lover.
Give her the boot. I know you love her, but if she has the audacity to protect the OM, claim one thing and do another, to YOUR detriment, she is no longer your wife in action - only in name.
Please try to resign yourself to D, and make it official by serving her as soon as possible. It will suck the whole way through, and you will second guess yourself (and her). But the things that have to change are on her end, not yours. You told her what she had to do, she agreed, and then did the EXACT OPPOSITE. Let her have it. And the OM. They'll be broken up in a month anyway and then you'll start to feel bad for her as she flounders to "find herself" again.
But it won't be your problem and she'll know why, and will have to accept it at some point.
Good luck, my D has been official for a little over a month, I'm seeing a great girl who has dealt with this mess like a champ, and while I miss my old life (as I thought it was), I don't miss my XW. She treated me like dirt. Just as your W is to you. Hike up your britches, hit the gym, take care of yourself, and a little ways down the road life will look up in so many ways.
So sorry she did this to you...it hurts and it's embarrassing, but then you start to realize that she is one who should be (and likely is) embarrassed, NOT you. Period. And never stay with her parents again. They are your future ex-inlaws. Not your enemies, but certainly not your friends in this situation. They likely lied for her when they said she was staying there.