This situation bothers me... I need some thoughts on this...?

its a tricky situation but you cant mislead him and must let him know that hes just a friend and no more. It isnt right to put yourself through that aswell, to pretend to have feelings for a guy whos a great friend. It might seem as cruel and hurtful but it aint you have to let him know , its going to be best in the long run. Try you luck with this other guy you have feelings for , you never know what may happen.