Not really. If you guys separated, he is no longer eligible to naturalize under 3 year rule, as it requires living in marital union until the date of oath.
Do not wait, live your life. Waiting would be immigration fraud. Nobody should stay married to get immigration benefit.
Not declined, but denied with 99% certainty.
Divorce, live your life. Husband should withdraw his N-400 today, he is not eligible. No explanation for withdrawal needed, just a letter saying he wants to withdraw whatever case # is and whatever alien # is. He is safe as he removed his conditions already.
Then he reapplies when reaches 5 years of being LPR. He may be asked about marriage etc in the future but it should not be a problem unless USCIS suspect fraud.
Everything else is calling for a trouble.
Good luck!