Best case, she is telling the truth, and she deleted the texts because there were things that were discussed that she would rather you not see. As in, maybe in the process of talking about his marriage/divorce, she mentioned parts of your marriage that she's not happy about, or wanted to vent to somebody about. If "Katie" confided in her, it might have been an opportunity for her to do the same, but on a lesser level.
Worst case, it's a whole lot more than that, and if that's the case, you might never know the truth. In other words, she could just continue to deny, deny, deny... and you would be left always wondering what is really the truth.
Not knowing you or your wife, it is impossible for me to say which is a more likely scenario. But, if I had to pick, I'd go with the former. Basically, I've been in similar situations with my wife (not exactly the same, but sort of), and I don't think that being secretive with a phone and/or deleting texts always equates to banging some guy. It could mean that, but certainly doesn't have to. Women are f'ing weird, and it's impossible to figure them out completely.
As far as what to do next, in all seriousness, you have a few options (besides dumping on chest, finding some strange yourself, etc.).
- Sit her down, explain to her that you feel like she MAY have done something more than what she's telling you, and ask her how she can help put your mind at ease. If she doesn't come up with it herself, suggest the phone bill thing, recovering texts, etc. Explain to her that, if some inappropriate things were said in the conversations, that still might be much better than what you're imagining (as a worst-case scenario), and encourage her to just lay it all on the table.