Don't know what to do anymore

Well, at this point you might as well tell her how you feel. It seems like she really likes this other guy, so you have nothing to lose right now. If she's gonna get away, then at least go down swinging.

If not, then you absolutely will find someone else. I've been there, and I know sometimes it seems a girl is just so perfect, but there is always someone else out there you'll find.

As for the staying friends with her part... tough to say. While it is a classy and maybe noble thing to do, sometimes it just doesn't work out. It makes it really hard to move on, because the more time you spend with them, the harder it is to get over them. So if you can get over that, then still hang around with her and stuff. If it is going to be hard for you, then it won't make you a bad person to distance yourself.

Jam it back in, in the dark.