swim endurance

If you want endurance, you gotta start banging out some longer distances in your sets.  Since you can do 50's, start out doing mostly 50's and add in one 100m distance to your workout.  Continue to take away 50's and add to your hundreds gradually.

Another approach you can take is to start with a rest interval you are comfortable with (ie 30 seconds between your 50's).  Continue to whittle away at that rest interval 3-5 seconds at a time each workout.  Once you get down to something small...say 10-15 seconds.  Convert your 50's to 75's and go back to the original 30 second rest interval.  Keep going up to 100's, 150's...you'll gradually train your body to recover faster with the shorter rest intervals.  When the rest intervals become so short, your body will start thinking its swimming the longer distance.

Regardless...I think your ultimate goal to get some real endurance work should be to go in the 3000 to 3500 range.  Make sure your swim instructor is watching your form too!!!  Bad form will make those laps seems really loooooooong.

Let's take a very important step BACK for a second...

first and foremost you should get your freestyle stroke checked BEFORE upping your yardage.  You don't want to do junk yardage and ingrain inefficient mechanics into your stroke...that's counterproductive.

if i had to guess, a couple simple adjustments will dramatically improve your perceived endurance without any endurance work simply by making your stroke more efficient and your swimming more effortless...aka swim further with less effort.

secondly, once that has been accomplished and you are confident you are not reinforcing neuropathways of inefficiency, then Jeff is right on the $$$.  You definately need to gradually increase your time in the water by incorporating a warm up, drill set, main set, and cool down set.

shoot for eventually (about 6-8 weeks from now) doing 3-4 times a week of 2,500 yards with a "long" swim session (still consisting of warm up, drill set, main set, and cool down mind you) of 3,200 yards.

the key to swimming is technique and the key to technique (once learned from an experienced, PROPER swimmer) is to get in the water frequently.

that's my 2 pence.

Kudos to you for finishing the 1/2 iron and not just giving up.

As far as breathing, you should not need to take big gulping breaths (unless you're sprinting).  Also, breathe out as soon as your face is in the water.  If the change in your breathing made you feel better then I would say it was the right thing to do.

A couple of things I'd suggest:
If you have Masters swim in your area, go and join up.  This is the best place, IMO, to improve your swim technique, speed, etc.  They have a coach, so you can get immediate feedback on your stroke/form/whatever.  Usually they welcome all levels of swimmer.  Don't be intimidated by how fast they are.  Swim with them for a while and you will get fast too.

Just start swimming longer at a time without rest at the wall.  Take one breath and go.  If you REALLY can't make it you can always turn over and just kick on your back.  If you can swim 1000, then you can swim 100 of that non-stop.  It's mental more than physical.

If you're swimming 50 and then resting because you are exhausted, then you are probably swimming way to fast.  Slow down.  If you slow down and start feeling like you're sinking, then it's probably a body position issue.

I'd also start working on bilateral breathing.  (Breathe every 3 strokes, so you're breathing on both sides.)  This really helps to balance out your stroke. Everybody has a preferred side to breathe on, so if this is difficult at first don't worry about it.  When I learned, it took me about a year to feel comfortable breathing on both sides.  To start, swim some 50's where you are breathing to the left, instead of the right (or vice versa)  It's going to feel really awkward at first, again this is normal.

Hope any of this helps!

Here's a great program that does what jkbostic talks about:

0 to 1650 in Six Weeks

I worked for almost three months to get a decent stroke, but couldn't do more than 300yds at a crack.  Then I found this and jumped in at week two.  Tomorrow, I'll do my first 1200 yd length ever.  Next Wednesday, I should be poised to do my first mile swim.

Again, as jkbostic said, the key is the intervals between the workouts.  The great thing about the above program is that these intervals are measured in breaths and, believe me, I MILK these breaths.  I take the deepest, longest breaths that I can but even then a 12 breath rest doesn't last much more than 30 sec.

Also, don't feel bound by the program.  I got a little hung up one week and did four days of that week's workout instead of just three.  I'm not so worried about the six weeks as I am about 1650 yds (approx. 1500m), because I'd like to do an Oly this fall, if I can get my yardage up and feel comfortable at that distance.