Oh, Soul, sounds like she's taking advantage now. Not only that but she's getting other people involved...and that's disrespectful and, as you can see, is making this a messy situation.
Take yourself out of the 'he said, she said' stuff. This is between you and her and no-one else and you need to stick to your guns with this. If any friends start calling and acting as go-betweens, politely tell them that anything between you and Michelle will be dealt with only BY you and Michelle.
Anyone with half a brain and some respect would not only understand that, they would'nt get themselves involved in the first place. Thus, this tells you what this friend is not trustworthy or respectful ( to you or Michelle).
Go up and read your 6th and 7th (if I counted right) post in this thread. Keep reading it if you have to. You seemed to be on the track that felt good to you there. You still have feelings for her and some hope that maybe you can get back together and those feelings tend to cloud up your gut instinct and doing what is really right for you.
If the right thing is to make another go at the relationship, I think this will present itself with space and time. Right now, it seems, it's all too close for you to make a balanced judgment call on your status with her and it seems she is acting in a way that is not fair to you.
Don't leave the ball in her court, be proactive and do something right for yourself. She will only respect you for it and realize she can't start dragging you around whenever she feels the whim.
I'm feelin for ya bud, I went through something pretty damn similiar (without the kids factor mind you) and I let my feelings for him be manipulated through a 'make up/break up' chaos that lasted a year until I finally caught him with one of his many girls and got that bucket of ice cold water thrown at me. It woke me up, I kicked him out of my life for good and damn did it feel beautiful and empowering!