Congratulations on your progress so far. It sounds like you have both learned a ton of stuff about what you do and don't want.
Poly itself as a dynamic can be tough to adjust to - when that includes such things as d/s it gets vastly more complicated, due to exactly the issues that you talk about.
I think that if you want to proceed, you both need to go through the "here's what worked" and "here's what needs improvement" process.
One word of advice - try to get things to the point where the discussion along the lines of "it's not working" is more about discussing what isn't working, rather than a unilateral veto of a relationship - which can cause backlash as you described "Well, if you're going to veto mine, I will veto yours" - if it was working well, this seems a shame to all involved. Good working poly relationships can be a challenge to make work, and it's a shame to have to end it based purely on factors that have nothing to do with it directly.
The "wound-licking" process after an initial attempt is not uncommon - just learn, take the time you need, and move forward.
Please check out The Birdcage - an open, friendly Polyamory forum for all parts of New York State
"Listen, or your tongue will make you deaf." - Native American Proverb