Just a few comments.
1. Highly approve of counselling. In my experience, the counselor doesn't tell you what you should do, but facilitates a reasonable discussion between two people. Especially with a 30+ year marriage between you two, conversations can be incredibly automatic. Having someone else there can make your mind re-engage in conversations. As someone mentioned, your wife may just be reacting to the emotions of having a huge life change, and isn't actually thinking through the whole situation.
2. I think no matter what happens, retire soon. Here are all the options which may occur:
a. You two stay together, kick kids out, and cut budget to live within means.
b. You two stay together, keep kids around, and cut budget to live within means.
c. You two separate, you give half your reduced cash/pension to her, and you live within your means.
Here are the options if you don't retire (look at this great organization, I can't help making bullet lists)
a. You two stay together, kick kids out, and you keep working and die of a heart attack.
b. You two stay together, keep kids around, and you die of a heart attack.
c. You two separate, your wife gets half your current salary/retirement savings, and you're forced to work until you are dead.
So at least semi-retire asap.
3. I was child #2, the lazy one (at least from your brief description that's how I see it). I wasn't quite as bad as you described, I did manage to get through college on time - age 22 (barely). However, during the summers I really wasn't motivated to look for a summer job. I was given just a few chores (including mowing the lawn), and I remember numerous occasions where my dad came in yelling about how I didn't mow the lawn. I just didn't have any ambition to change my situation because my housing was paid for, I got cash handouts while in college, and I had some nice video games to play. Eventually our fights got bad enough that I wanted to leave, but it was hard to drag myself away.
Once I moved out after college, I received motivation from myself (wanting better housing, toys, etc), and have done very well for myself. I think that his pushing helped me get where I am, and perhaps if he had been tougher (less cash during college, etc), if I may not have done even better.
4. Enabling doesn't help anyone in the long run. You will eventually retire/die, and the kids will need to fend for themselves. What is better, they become independent at age 27, or age 45? I'd say the sooner the better. Do it while you still have cash to "save" them if necessary. As others have mentioned, they can pool their money and rent a place for 1k. Surely they can find a little cash so they won't be homeless. Then they can flip burgers, etc until they turn their own life around. Paying their expenses does nothing except enable them to screw up their lives further.
5. Being a stay at home mother usually lasts while the kids need a mother at home, IE ages 0 -> 5ish. Once a kid is in school full time, many mothers go back to work. My own mother went back to school & work once my youngest sister was in school. It is a hard step, but she felt it was her job to continue to contribute to the family. I have known many families (such as your own), where the mother just stayed at home, taking the easy path. Is there a reason you've let her stay home all these years? As someone else asked, what has she been doing? There is not a full time jobs worth of work in an empty house. Perhaps some of your issues stem from feeling like your wife is not contributing? Relationships are supposed to be partnerships. If you make the cash, you should make the decisions on where/how you will make it. If you wife wants more money, she can work. If she thinks you need more cash to keep the kids in the house, she can work to pay for them. Then she can get what she wants, and so can you.
Anyway, hope you reply and fill us in on how things are going
