Thanks for replying all of you. I started to feel better after a while. I choose to believe it was the positive thoughts from you here.

I stayed busy getting things done around the house and refused to dwell on it, since I know that would have only made me feel worse. At least this way my todo list is shorter.
I'm convinced my wife is an N w/ some BPD tendencies. I'm convinced that she's way better at getting people on her side than I am. Her: Extroverted manipulator. Me: Introverted Avoidant (not so much anymore). I'll NEVER win that battle so I have to find another way. On some level, I'm just not convinced that I'm OK. I hear all of the wonderful support and comments from you and believe me, it helps a lot! At the end of the day, though, I know *I* need to be OK with myself or I will have to depend on others for it and be at their mercy. I believe that's what landed me in this relationship in the first place. This brings up some awful, scary feelings. I've just tried to make room for them today and not solve anything right now.
!. The counsellor may not have heard your wife say "that didn't happen".
The counsellor may have missed it and therefore does not believe it was said. The counsellor may not be the very best alive and may very well be taking sides. I would not be shocked to learn this. Don't panic.
I've had a feeling for some time that this counselor feels sorry for my wife and has at least shifted in her favor, if not taken sides. No proof, just a feeling. Since they talk, I am afraid that this might turn my longtime therapist against me, and I really need his help.
2. When was the last time you had sex? Are you hallucinating that too?
I had to laugh at this one!

Still, in a court of law, it was me who said no more "sex" until we can talk some things out and develop some intimacy. Besides, I'd much rather make love than have sex any day!
Third, the couples counselor was in over her head because she couldn't keep the session safe, and argued with you about what was heard. You would need a better one, if you ever returned to couples therapy (IMO).
This was the case right from the start. Neither my wife nor I felt safe in there. In hindsight, I believe that the counselor should have seen that we were not a loving couple who just needed to learn a few techniques to improve communication. Trying to do Imago in a grossly dysfunctional relationship is ridiculous. It just created situations for both of us to feel even more used, hurt and frustrated.
Hang in there. You don't have to justify one damn thing. Who is this judgemental diety anyway? Not one I know.
No, I think the judgement is mostly coming from me on this right now. I hope to get a chance to talk to my pastor about this tomorrow. I've got my fingers crossed that he will be supportive when I explain the situation. I believe that I've got my answer from God already and it is "Move on."
Would it make sense to move out for a period of time and put off any decision about divorce until your head clears? In your case it seems you will have a hard time clearing your mind as long as she is constantly there to control it. I could not get my mind free until I got away from him. Thank God my wife finally forced me to just cut off contact.
Honestly, I think my wife would enjoy it if I moved out and she got to keep living off my money. I just realized that's why I feel against a separation. I agree that it is harder to get my mind clear in this environment. Here's something else, if I have to leave to get my mind clear, that's a clear sign that I need to just leave period. In any case, I need to work to get my mind clear, I just don't see a case for half measures. Darn that judgemental intJ again!
Incidentally if I had any doubts about your wife being an N, your last post cured me of that. That is classic N. Vintage stuff.
I understand about being careful with diagnosing others or yourself. But I've lived with this person for 17 years and known her for over 2 decades. For at least a decade, I was codependent and "fixing" this person was the focus of my life. Sometimes you have put down the DSM and admit the obvious!