Don't use your inheritance to pay for the renovations. It's a money pit essentially, I don't think you'll see the money back. The money could be used to start you up again, to start with a clean sheet.
Regardless of what happened when you had the break, it has no bearing on anything.
Does DH have a job comparable to yours? Does he contribute as much as you? Or is he one of these types who sees himself cutting back work to PM the renovations? You see it on property shows, that the wife is busting her gut, DH is there looking busy.
I think from RTFP, from what you've said, you're best off cutting your losses and starting afresh. Even with an annex or renovations, she's still going to be a big part of your lives. You want 2 people in your marriage not 3.
If you leave the house, leave your name on the deeds, but remove all financial responsibility for the property from your name. If they decide to sell in the future, you do deserve what's yours. I look back at everything I paid into a property, sometimes I think I was daft to just say don't worry about it. On separating I wanted an easy life, but many people split with their names still on the deeds, so if they sell 10 years down the line, you get your half of what you paid in.
As I said previously, maybe rent somewhere for 6 months, during that time, if nothing changes, close the book on your relationship, which I understand isn't what you wanted or want, but you've got to put yourself first. I think that's only fair.
Feeling like a stranger in your own house, where you're meant to relax and unwind after a day at work. It really can't be easy.
Also as you separate make clear this is a separation, you don't want DH coming after your savings or inheritance. If he pursues that route, consider more seriously getting your half of the house, it's only fair. During the separation be strict on the fact that he is responsible for the property, any issues are his to deal with.