Thank you to everyone for your replies, it helped calm my nerves and feel better about the situation. I had felt like I was cheating because I have an emotional connection to guy #2. I think he was afraid of my husbands reaction at knowing who he was because we have all known each other socially since high school and thought my husband would have a huge problem with the thought of us together.
Right now I am just giving everyone the weekend to relax and sort out feelings. I figure if #2 can't talk openly to me about how he is feeling and why he reacted the way he did then he just isn't the right person for us.