i would put 12k to the mortgage, 18k to kid1 and give 120 a month to kid1, 125 to kid2, 80 to kid3. this might seem unfair to kids2&3 but it wont be. also add the heloc payment to kid1, once it is paid off in 2013.
12k to the mortgage changes the payoff date to june 2014, which just before kid1 goes to college.
assuming no compound interest on the 529 accounts and no raises, you'll to able to contribute 15k/year for each kid to college expense. when they enter college, kid1 has 33k, kid2 has 15k, kid3 has 15k. once you pay off the mortgage all extra money goes to the kid in college with the longest to go, so 2 years to kid1, then 3 years to kid2, then 3 years to kid3.
remember you can rollover 529 accounts to another child without a tax penalty, so heavily funding kids1&2 is ok because the extra can flow down to kid3. also if you get near the end and you're short on funds then you can take out a small loan for the last year, because there is 16k extra income while kid3 is a senior not accounted for anywhere.
the best strategy with you not taking additional debt, is to payoff the house before kid1 goes to college, have a 2 year buffer in kid1 and 1 year buffers in kids2&3. basically you use the 529 to cover the double tution years, while also having a one year buffer which is restock with current income. while it is debatable what is the best way to do this(depends on the rate of return on your investments and how comfortable you are with debt), you should try to get to this because it will allow you to give a high substainable output of money to all three of your kids' college expenses. i just gave one of many ways to do this.
as for retirement savings, you seem be on track to retire comfortably(100+% of income) in 20 to 25 years, if i am reading everything correctly. adding 10k to roth and 7k to 401k with 116k in savings(almost a 25% saving rate... nice), husband pension replacing ~42% of total income and once social security starts chipping in, that will definitely put you over the top.
you do realize that the standard deduction for married couples in 2008 is 10,900. the mortgage interest is less than 7% of 60k or 4200. do you have another 6700 in itemized deductions?
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