Is he in love with someone else or is he possibly gay?

I started "seeing" this guy about a year and half ago while he was still married, but we mostly just fooled around and we never had sex. We are really close emotionally, enjoy spending time together, and we have a lot in common. He's now separated from his wife (not because of me - it was already in the works), but we still have not had sex even though he gets really turned on when we are together. At first he chalked this up to needing to get over his separation/divorce, so I left it at that.

However, recently he told me he's been in love with someone else (not his wife) for the last couple of years, but he only realized this after doing some soul searching. He can't be with her because she's married. I am still spending time with him in hopes he'll get over her, but I am not sure if it's a futile exercise. We are still emotionally close and physically intimate (to a point), but he always pulls back in the heat of the moment claiming he can't continue because he's not over her.

He's admiited to having problems performing with other women in the past, but he never really explained why. He obviously gets turned on by women; he is very affectionate with me, but he just can't or won't have sex with me. I have read that gay men could get turned on by women, so maybe this is what's happening?

So, is he really "in love" with someone else, or he possibly gay and doesn't even realize it, hence all the excuses and performance issues?