You deserve kudos for handling things as well as you did ... and I hear you on what a hard situation it is, where you can see K as a bad guy, but H thinks it's all her fault. Sounds like a classic abusive/dependent relationship. And only H and K can work that one out. They have to decide what to do about it. If H is to be "free of that relationship," she'll have to free herself.
As bad as K seems (and he sounds pretty bad), we have to realize that even bad people can change, and maybe if K gets some therapy, he might improve. It also sounds like H and K might need some couple's therapy. I know that's probably not quite what you'd want to hear; your hope is probably that H will leave K and then you can become a C/W/H triad. That does sound nice, but try to have an open mind about the possibilities and don't attach yourself too much to one particular outcome.
I don't have a lot of advice at the moment; you seem to be doing about the best you can: working on your relationship with W, and offering H moral support. That's generous and good. Keep us posted on how things are going, and I'm sure we'll have some more thoughts or advice for you.
Love means never having to say, "Put down that meat cleaver!"