[Solved] Ex is making my child hate me

This is my first post, so bear with me.

I have a son who is 4 and a daughter who is 2.
My ex kicked me out of our rented family home 2 years ago this August.

Basically, this is what had happened.
In November 2009, my little girl was born in November. She had been out of hospital for 2 weeks and then was admitted with serious bronchitis. She was seriously ill and in hospital for over a week. I stayed by her with my wife as long as we possibly could.

I had ordered a new car the week before and went and collected it the day my daughter was released from hospital.
Anyway, in July 2010, this lady ploughed in to the back of our car whilst we were stopped at a zebra crossing, she was doing 40mph in a 30mph limit. Anyway, we eventually got compo.
My wife had purchased a car 3 years previously but never paid the repayments.
Anyway, we had large debt and I used the compensation to pay off the debt.
The next day, she had bailiffs come to the house and demand £3500. She went skits because I had put my debt first and not hers.
I walked away from the home and trotted off in the rain feeling really shitty and I didn't care.
I really felt like my world was at the end and finished with. I was tired, hungry and wet.

I was threatened by her mother with her calling the police because i was a 'missing person'
I didn't text or take any phone calls.
I was at the end.

Eventually, they found me down a lane and I got in the car and she said it was all going to be ok.
My parents paid the £3500.

I thought she was going to be ok with me after that, I tried showing her that I was stronger than her, but nothing I did worked!
She kept saying that I was a disappointment to the kids and that if I cared about them I wouldn't have walked off.

My parents bought our replacement car after the accident and I made sure they put it in their name and not mine.
I knew that if she kicked me out, she would expect the car and I wasn't prepared to let her take everything I had.

The day after I picked up the new car, she told me to pack my things and leave.
We had arranged that I would have the kids every weekend Saturday after work at 2 until 5 on Sunday and Wednesdays 3 until Thursday at 4. This worked well.
However, each time I went to my ex's house, I noticed some shoes there that were my daughters God fathers shoes.
I thought it was a bit strange, his car wasn't there and he wasn't there, but why were his shoes in my house? This was after just one week of me moving out. I kept it under my hat that I knew and didn't want a shouting match with her.

In August 2011, I privately looked up on her Facebook using someone elses account. I had blocked her and her family from contacting me using Facebook. Her status had been updated her status to ENGAGED.
This really shocked me as I could never have imagined that so close to our break up.

I found out in November from my little boy that she was pregnant. She had the baby on 6th April this year.
Technically, we are still married as we haven't been through divorce proceedings.

Now she is slowly stopping all contact between me and the kids and it's really starting to annoy me and my family.
My little boy thinks the world of my parents and family but I am now only able to see them on Sundays 9-4.
She won't go to mediation and everything I say she twists and tells someone and then it gets back to me what she has said.

I don't know what to do. I know she wants to get a divorce but I don't know whether she is waiting for me to act first.
I have spoken to a solicitor and they want a minimum of £500 for a NO HASSLE divorce.
If she then disputes anything then it will cost more.

Obviously, this August is coming up to the 2 year anniversary of the break up and I was hoping to get the divorce done as soon as I could.
However, she has committed adultery and I really don't know how this could effect a divorce case.

I need some help from people that have been through this. I am prepared to keep the kids out of the divorce proceedings to make it hassle free and keep the costs down as the solicitor said this could cost an extra £8000. I have no assets, I live at home with my parents and I don't have my own car or anything in savings. So I am pretty sure I am covered financially, other than the fact I am a direct in a company. However, on advise of the accounts, I am a silent partner and technically, my ex can not touch my money.
I pay her £450 per month for maintenance this is a verbal agreement. I technically only get paid £800 per month by my company, however I actually get £1800. My pay slips say £800 but the £1000 is in dividends.

If anyone can help, it would be much appreciated.

Thank you and God bless.