Peony - be proud of yourself. You've got 2 beautiful kids, and having 2 under 4 is hard work, yet you're doing it. You did 1 and a half years of a degree course so you've proved that you have the ability to do it. I think that perhaps going back to Uni and finishing it could be just the confidence boost that you need. I don't think I had anything as severe as PND after the birth of my kids, but I do know the feelings of depair, being swamped and loneliness that you get when you are at home with children all day. Also, I stopped working just before the birth of my 1st about 5 and a half years ago, and the thought of going back to work frightens me, as I'm not sure how I would cope out there in the real 'adult' world. I will, of course, one day when the kids are older, confront my demons and get a job. So I do understand why you are feeling scared.
But, I really do think you should go for it. I did my degree straight after school, but we did have some mature (sorry, don't want to make you feel old!) students and they were a great, nobody saw them as any different from anyone else in the group. also, they were are great help to us all, as they had many life experiences which we hadn't and so could teach us a thing or two. Generally, student life is pretty relaxed and flexible, so it could be just the start you need to help rebuild your confidence. If you don't already have child care sorted, many universitys now have creches onsite (not sure about cost though, but hope that they would be quite reasonable). Coursework will be difficult on top of looking after the kids, but I'm sure you will quickly find a routine that works for you. I'm sure that other Mumsnetters who have been, or still are, in your situation, will have some useful tips for you. Also, university is a great place to make new friends and you will probably meet someone in the same position as you and may beable to help each other out.
Finally, I have to say that old cliche, if you don't try then you'll never know! I really wish you well. Remember to come back to Mumsnet for support. Good Luck!