@Brolt,
I know how difficult this can be as I experienced something similar in a former relationship with a woman who had children who ruled her life. After 23.5 years (and the boy was reaching his early and mid-teens) I felt obliged to break it off. I was in my mid-40s.
While it may not have had to end with breaking it off, it did create the peace I was seeking. I learned better coping skills. so did her children...eventually. However, I felt strongly that it never would have happened with my staying there.
The long and short of it is, while you are living there in the midst of this drama, you can no longer tolerate it. Living there is making the problem worse. You tried the counseling route but to no avail. Her permissiveness is as a parent is a side-issue now. You need some peace away from him and his mishigas.
However, because this situation has been partially due to her lack of assertion of the rules...it is up to her to make the rules and boundaries - not you. Don't get in the middle of it..or you could risk being resented by all parties concerned. If there's a falling out, don't be in the middle of a territorial or a 'who's the boss' sort of power struggle where no one wins and all the relationships end up damaged or broken.
If it's not a total impossibility, I'd continue your relationship with her but move out and find your own living situation but do not stop seeing her. First thing I'd do, if it were me, is discuss moving out with her and see how she feels about it.
That living arrangement seems no longer tenable for you. Both of you don't want bitterness or losing the relationship over stubbornness and staying on while he still lives there. Eventually this freeloader will move out.
Your g/f has to develop more backbone but that is not your call to insist. It is unlikely to change based upon the pattern of behavior and history that has occurred. You need to defuse this and moving out might solve it.
If your g/f can possibly understand that your love for her has not changed one iota...but you no longer can live under the same roof under these circumstances.