I constantly re-read my work before writing again. It helps me get in the proper mind set. But my biggest problem is that I make more changes on what's already there that I don't get further along in story. Thus I walk away, having made a bigger mess and no progress. How can I change this process?
You're going to have to change your setup.
1. Stop re-reading your work before you write more. This will feel frustrating to you but it may be a rule you have to give yourself so you can move forward. It's hard to write new things but easy to revise what you've already written. It also can lead to berating yourself for writing the "wrong" thing in the first place which can take you to the dark place of not feeling worthy enough to write more. Don't give in to doubt. Cut that sucker off at the knees.
2. Review your work if you need to, but in a format where you can't revise it. There's nothing wrong with reminding yourself of the last chapter or scene you wrote before you get started on a new one. And if you're in the middle of one, you have to re-read what you have. Don't do this on your computer. When you're done for the day, print out what you've written and leave it unread on your desk. When you go back to your writing (whether it's the next day or next week), use the printout to remind you what you last did. Make sure you accidentally forget to leave writing implements nearby.
Once you get to a place where one of these things works, you can and should set aside time for editing. Going back and revising things is clearly important to you, and it's a good thing to do. Your problem isn't that you revise, it's that you use it to avoid writing something new.
Allow yourself the pleasure of editing your work. Just carve out separate time for it so it doesn't interfere with actual writing.
Have you tried plotting the story first, in order to hammer down key story points at the right times? A story that meanders is less likely to feel like it has a shape to it, than a story that adheres to a standard structure.
You don't need to follow a format, but from the sound of your question you seem to be writing and re-writing hoping that one rewrite might get you over a hump and onto the next part of the story.
I suggest patterning off of a story you enjoy. not copying and not plagiarizing, but analyzing the story you enjoy and deciding what things of importance are happening when.
I also suggest identifying the key problem and key goals in your story. this can be in an outline form or a graphic form. Aim for rising tension and moments of relief.
Then use discipline to write to that outline or structure. If you know that chapter one serves the purpose of introducing the world, for example, you can move onto chapter two once that is done and not return to chapter one until you are through a good chunk of first draft.
Edit: It's also important to remember the structure of a scene.
Scenes can be followed by brief sequels (Reaction Dilemma Decision) which then launches into the next scene. If your scenes are not structured properly, you'll feel that as a shortcoming in the story.
I always start my writing sessions with rereading. I use it as a tool to get into the right mindset and remind myself of the tone of the work. I find that if I don't i will end up copying tone and style from the last thing I read before this.
BUT... i don't go to far back. I just l just read the last page, or at most the chapter. That is also the area that usually needs the most adjustment as it has not been reread before. Ten minutes is my maximum time spent reading. After that I am just warmed up enough to hit the ground running in my writing.
The core issue may not be the compulsive rewriting, but the difficulty of getting back into the story. Try deliberately stopping in the middle of a sentence, or at least, in the middle of a scene. When you come back, you might find this makes it easier for you to jump back into the creative mood you had before.
You might also try writing more frequently, for shorter periods of time, if that is feasible. If you write a paragraph or two at a time, several times a day, you might be able to stay in the work better than if you write in longer, less frequent chunks.
Finally, "one weird trick" that I recently learned that has made a huge personal difference, is learning that your inner writer and editor are awake at different times of day. If you write at the time of day you like the LEAST (mornings for night owls, evenings for early birds), your inner editor goes to sleep, leaving your inner writer free to write without interferemce.
I used to have the same issue. Even if I planned ahead of time, I would read again my previous session and find myself editing it. There were multiple reasons for that. First, in between sessions I fleshed out certain ideas better, or I came up with new details, or simply one additional line of dialogue. Second, as I continued exercising my writing, my style changed, and the past writings sounded flat and clunky. The latter was a terribly fastidious feeling that I just had to correct.
My advice: don't. Ignore rereading. Just write. Start from where you think you arrived, write the same scene twice if you get confused, but don't look back. You need to accept that until you finish the initial draft every single action that is not writing is just an excuse to procrastinate.
On writing.se there are is quite a number of questions on how to just sit down and write. I found many of them to contain great advice.
I too start by rereading a part of what I wrote, in order to "get into the mood". And sometimes, instead of getting into the writing mood, I get into the "this doesn't work at all, it needs to be changed" mood.
Here's what works for me: instead of editing, I mark the part that needs editing, and leave a comment specifying what needs correcting. Sometimes it's a content change: I need to make a scene fit with a worldbuilding detail I added later. Sometimes I don't like the dynamics of a scene, or the pacing is wrong, or the scene is doing too much telling and not enough showing. Whatever it is, I leave a note and move on, to write the new stuff I planned to write.
Why does this work for me? Seeing a problem and not addressing it creates in me a sense of "incompleteness". It's this nagging feeling that I saw a problem, and ignored it. But if I start editing straight away, I'll be facing the same problem you're having - all editing, no new stuff getting written. Marking the problem for later and specifying what exactly needs to be changed gives me a sense of closure: I've done something with the problem, and I'll be able to proceed later from the same point, rather than looking for the problem all over again. Also, sometimes I see a problem, but I can't find the solution straight away. I wouldn't want to waste time with it bothering me, when I've set out to write the next scene. Much better to leave the problem for later.
When do I get back to actually doing something with those marked problems? When I have a writing block, and moving forward doesn't seem to be happening. Then, doing the actual edits actually helps me unclog.