Overcurrent / short circuit protection for back to back mosfet ac switch
After much thought about this circuit. 

First concentrate on the dynamic switching times of the two IRF740. Their switching on/off times are under 50nSec. Operational failure modes of most all AC switching supplies is transient damage. 

That said do not couple the gate control direct to the AC connections. The time constant of your current limit circuit is way to slow. Go back and think of a simple LC current lag network. It could trigger an off state for U1 for example.