I think it's always a good idea to trust your instincts, and working with a counselor will help you to hone them and use them to make a healthy decision.
The second option would be to allow myself to have space (no contact) until we move in a couple months for the purpose of strengthening myself to get to a point where I can stand up to her and confront her when she is mistreating, guilt tripping or manipulating me. When I get back to the States, I would have a prearranged time to meet with her to discuss some of the poor dynamics of our relationship with regard to her BPD and set stronger boundaries with her.
This is more of a therapeutic separation, and sometimes that will help you find some clarity and strength. How have things gone with your counselor so far? Do you think that you can work out a plan with him/her to help you get to a better place in a few months?
I totally understand the physical effects of stress--I've felt that too. How are you working through the headaches and nightmares? I find that it's easier to deal with my mother when I'm feeling good and taking care of myself.
I know this is tough, but it sounds like you're really thinking this through. There's no right or wrong way to go here--you need to honor yourself and determine what's best for you.