I would leave the romantic relationship aspect and remain platonic friends.

Putting the gender issue aside, starting off a relationship with a lie, especially something that important, is a huge indicator to leave ASAP.

You're moving to a different city just because you hanged with a tranvestite without knowing... Lol 

I'd be pretty damn upset with myself if I'm honest.... to have been snugged up together on the couch but not have given her a visible erection, I'd be thinking I had been slacking and it was my fault for not being sexy enough to make her secret show

If I was in this situation where your heart skips a beat when you even think about the person I don't think it would make the slightest bit of difference to me, but I don't like lying.... and it would have been a pretty big lie to have been kept from you all the time, so I'd just have to get over that but it'd be just based on it being lied to, not what the lie was really.

Question! Is she longer than you in this situation... that would make me feel.... small!

What does the year we are in have anything to do with anything?

Average, I already said! :P

You can be straight and still have a psychological gender different from your biological one.

Experimentation would be bad in this case. It's irreversible and there will be "scars" your whole life (didn't find the right word).

Even I who hate being a man hesitate at this point, so I'll advice you to not do it (But crossdressing is funny, you should try once !)

"You both decide that it is time to make an extra step. You both love yourselves. The passion is flowing. It doesn't matter where, her apartment? Your house? At the forest? Take your pick."

Sounds like alot more than just hanging out! If it was hanging out and not touching/feeling, making out, or physical contact like that had been done, then I would just tell the person off. 

Secondly, I have one particular friend in our group of buddies who I tend to rival with at a lot of things. He would never let me live that down so yes I would move,lol.

Yeah, that's the thing. Once you get hormones into your body, there's no point back. You could try to "undo" it by inyecting male hormones, but the result would be disastrous for the body.

Yeah, I have too much of a male body, but when I get a bit of a money, I'll invest into it :P Even the manliest of bodies can be turn into a nice-looking woman, with enough dedication!

>.> How average.... damn it I've thought about this situation far more than I'd like to admit now... Gonna go fail to heal people in wow and let their deaths distract me!