"I really didn't know that it really was ok, I mean, really, in all effect, she was pimping out her husband for stud services." -----
If thats truly what she thought, thats a very very huge misunderstanding of where to start poly in my opinion
"And when I told her, she hugged me, and told me not to hurt him. To love him, to think of him, to care for him and to consider him when I make my decisions. In return, I assured her that I very much wanted a relationship with her as well as him. That I loved her as well. I could really see myself loving both of them, and being with them." ------
had you and your mrs prior to you bringing 3rd in decide your mrs and the 3rd would be involved as well? maybe she thought it would be a V type situation and wasnt quite prepared to actually see you with 3rd and wasn't ready for 3rd to want her?
"And I mean, balls to the wall, leaving skid marks and smoke reverse. So, in an effort to make sure things were ok, I tried to stay out of the discussions she had with her husband. After all, it wasn't my place, I was just a guest in their relationship"---------
this raises red flags to me, especially the last sentence, if she truly felt she was NOT part of your relationship and has no right being part of a discusiion concerning the 3 of you, then I'm woefully confused, why on earth would she feel that way? it really sounds like at least the 3rd if not your wife were both very unsure of your complete (as in all 3 of you)relationship
"She and I were talking more, and we were talking about more intimate subjects. More personal things, things that made us a 'couple'." ------------
okay, but were they and you actually discussing your relationship? at any point did you all say out loud what you all each individually and triadwise wanted from each other and your relationship?
"She insisted that things were good, and getting better, and that she wanted me there." --------
yes, but again, did the mrs ever say she wanted to be physical with 3rd or siimply let you and 3rd be together and her and 3rd be friends?
"I do understand the reading the mind statement. While she told us for 8 months she was trying to be okay with it, she really never was. But no, i'm not a good mind reader. If you are going to feel one thing but say another, honestly I think you can't complain when things dont go your way. You can't expect someone to read your mind. You have to say what you need or want. Maybe in this case she didnt feel like she could say it because of exactly what happened, but it's better than living in a bubble."-------
how about she was unsure at first and simply wanted to give it a chance to try and make it work for you all? and finally realzied she couldn't to late after you and 3rd had already professed your love? too late then to say no thanks, and unfortunately soemitmes when folks feel caught between a rock and hard place they choose very poorly what to do next
i personally would suggest the three of you make time, find some quiet uninterrupted time and place to all sit down and really talk and listen to one another, keep talking, talk some more until you really understand each other then talk some more just to be more sure than sure and see if you can save things, or if your really not interested in that, then i'd encourage making a choice of whom you want more and as painlessly as possible let the other go, but thats just me
good luck to you