A temporary separation might be next, give everyone to cool down.  
 

As for the SD, her mother can see her outside of the house and you need to just disengage from her totally.  The bios don't need to see her right, she sounds like a hot mess right now.  Not everyone slides into adulthood gracefully.   Boundaries are your friend.  SD  put some in place, you put some in place.  Respect them.   

Anyone who can't treat both me and my husband with respect don't get to have a relationship with my kids.  Period.  I wouldn't let her near your kids.  Who knows if she might decide to try and turn them against you? 

first off, if you find something of hers, tell your wife and if it's not given over throw it out after 48 hrs. 

second, your wife is more than able to form a relationship w/ her daughter outside your home. 

have you considered marital counselling? it may be the last thing that can be done to save what you know is falling apart. 

Have you thought about trying to do family counseling with your SD?  It feels like your relationship with her has been painted into a corner.  Perhaps her GF is controlling and you represented a threat to her... and so you were who the GF focused the war on.

It's tough to understand though.. as her only father figure.. to have all feelings turn like a light switch.. I would be interested in figuring out how to fix it vs setting  up isolated camps at war.

I would also consider that divorce would likely cause more issues.. as your kids would then be given free access to their older sister.. but add in the resentment of the family breaking up.. you would probably be an even bigger scapegoat.

But, counseling wiht your sd.. and with your wife (separately).. seem in order.. I would hope the goal could be to mend fences.. not create more isolation for yourself.

I DW has to do something, she can't just wish things will change. If SD means so much to DW. Let SD support her. I know DW wants a '''Happy Family  '''    Maybe seeing someone is a answer. Just you two to start to get your relationship right first.  If you get yours and DW to a workable relationship.  Then try to work on SD.  
Knowing SD relationships will never be the same.    Certain thing are just not undoable.  

Second guessing yourself does nothing but distrupt and cause turbulence. However, clearly understanding the topography at play regarding SKidults and their BioParent that we are married to gives us, is a never ending map to adjust to in the drama and conflict.

Stop fighting with your DW and tell her what is required for SD to have a place in the family. If mom wants to engage outside of that then she does it alone without you or the young ones.  Exposing young children to toxic older sibs, half sibs or otherwise, is not what quality parents force to happen.  My SS is the eldest of 4 SpermIdiot spawned half sibs by three different  baby mamas.  In our blended family journey, SS is the one who chose to step away from the toxic SpermIdiot, SpermGrandHag, and sadly his three younger half sibs that include spawn #2 who is on the dole, #3 who is in prison, and #4 who is not far behind the convict.

Place your boundaries, and defend them even if that means holding your own DW accountable for keeping her eldest away from your/jher younger children. Children that do not deserve to be flushed down the crapper with their elder sister.

My SS refused to flush himself down the crapper with with his father and his three younger half sibs.  It broke his heart, but as an adult of character he did what was hard.

The mother of your children needs to do the same thing. As does their father. You.

Stop waffling, stop fighting with your DW. Set your stance, defend it, and tolerate no bullshit from either DW or SD.  Be direct. be calm, and make it clear to your DW that she has no choice or she will lose her marriage, you, and your boys.  

We put together masses of fact, documents, etc... to protect our son.  The most infuriating thing in our 16+ years under a CO was that the Judge was hell bent on retaining contact between SS and the SpermClan.  Though we kicked ass otherwise. Full physical and legal custody was upheld for my DW, a pittance in CS was ordered, and limited long distance visitation was ordered.  In the 16+ years that the CO was in effect SS saw his Spermidiot no more than portions of maybe 12 days per year though the SpermGrandHag did continually manipulate and took her idiot son's visitation.  Our son succeeded where the preceeding generations in the SpermClan and sadly his three younger sibs were doomed to follow the failure path because they were raised by the same failed adults who created their serial statutory rapist Spermidiot.  All it takes to give kids a chance to avoid that crap is one person preferably their quality parent, to defend their future to the fullest extent possible. Keep in mind that your boy's mom is a failed parent. She created your SD. The SD who is the catalyst to the demise of your marriage and  your family if your DW does not gain clairity.

Document, document, document and if necessary, protect your boys to the fullest if their mother makes the wrong choice.

IMHO of course.

I have. Many have.  The key is to either set and defend your boundaries or cut and get on with living your best life.

I escaped a blessedly short though toxic marriage to a serially adulterous spouse who is in the process of repaying $Millions that her mother and family embezzled from her mother's employer. It was mainly XMIL but the business owner sued the entire family and won a $Multi-Million judgment against the whole family except my XBIL who was long gone a decade before the law suit and then federal charges and trial occurred that convicted XMIL on top of nailing XMIL, XFIL, XW, and XSIL for the $Millions they had to repay.

I escaped, took my do-over and have lived an incredible life including my 30+ year marriage to an incredible woman.  My escape was 22 years before the legal shit storm and was facilitated by my serially adulterous XW filing for divorce when she was knocked up by one of her many cheat partners.  He ultimately became XH #2.  Aft last count, she was on her 3rd husband but who knows how many she has had more than a decade later.

Do not discount you, do not accept anything less than living your best life. Hopefully your partner pulls their head out of their own ass and is a part of that. If not, there is no shame in a do-over.

Take care of yourself.

I would rather role the dice on a do-over than play out an obviously losing hand with a partner who has clearly shown who and what they are that is not capable of making a life of adventure and a love for the ages with me. To death do us part should not include toxic from a partner.

I must have missed something.

You should have kept it, of course, and DW and you can have some major workout sessions with it. Get nice and fit!