I am curious, while no one ever WANTS their marriage to end in divorce, why is it not still an option for you? There is no way I would stay in a marriage like that especially when I have a daughter who is going to take her cue in the men she dates based on her father and how he treated her mother. :-|
I just read why you feel you can't get a divorce. I'm sorry but to protect my children (who from what I have read are already exhibiting behavior like his) I would do everything I could to get out of there. Find a pro bono lawyer who will do the divorce for cheap if not free. Do you have any friends or family who would be happy with some "roommates" so you guys could share the cost of a house?
I was once told in a self improvement type class that there are an infinate number of ways to achieve something. The problem is most people are only willing to think inside the box.
Someone like your husband is not going to change so you will either have to allow yourself and your daughters to be doormats or find a way to get out I'm afraid. Personally, I'd want to give my daughters a chance at a more "normal" life for their sake.
I wish you the best. I am VERY sorry you have to deal with this. You do NOT deserve to be treated this way. You really don't. I hope you know that. You should not have to accept his behavior because of his obvious illness. I understand your husband probably can't control himself. I am sorry for him too but still don't believe that should mean that your daughters and you have to suck it up. You just really deserve better. :(