I've been through this same thing and dealing with it for the past three years.
Three years ago, I proposed to my closest friend. He was the only person I've ever been able to totally trust and who I had more than just a physical crush on. For the first time in my life, I felt totally attracted to somebody. We'd shared a lot of the same interests and pasttimes, and after a lot of thought, I decided to just come out and propose to him. He admitted that he'd known for some time that I was attracted to him as more than just a friend, and he just wanted to take things slow to see how they went.
A little over a month afterward, I discovered why he wanted to take things slow when I ran into his ex on either MySpace or Facebook. At the time I'd proposed, his ex had been back living with him, and they'd been hiding it for some time from me.
Needless to say, I was devastated. He downplayed it at the time and said that he and his ex were just roommates, that it was just temporary, and that he hadn't said anything because he knew I'd get upset. I tried remaining just friends with him, but over time he's grown more and more distant. Plus, his ex is still living there, and his ex keeps posting online how they're together. Obviously, somebody's not telling the truth.
One of my new year's resolutions was to try to move on and not get held back by the negative stuff from my past. My friend, I feel, has been one of those things. About three weeks ago, I unfriended him on Facebook and Myspace. He hasn't even asked what was up with that, which, to me, has confirmed my suspicions. It still hurts at times when I think of him or see a guy who reminds me of him, but I'm moving on with my life since I do have a lot going for me and am currently working on starting my own business so that I can quit my current job.