Wow.....yeah it sounds to me like she wants this guy. But she feels bad for doing so.... I mean it doesn't sound like she would cheat for sure....but it definately looks suspicious.......and well this other guy is far away..

You need to sit down with her and have a talk. Just tell her that she needs to be honest with you about what SHE wants. Tell her that if she wants out of the relationship she should do it now....before hurting you even more. But then let her know that if she wants to be in the relationship....then she needs to cut out the crap talking about how she wants to be with another guy etc.....and then denying it to your face....and then hating her friend for saying anything.

Give her an ultimatum......"Either be with me.....or go and do your own thing....whatever makes you happy!"

I know this will hurt you either way.....but you need to know. YOU deserve to know. I mean why invest more time into a relationship when the girl wants out...but doesn't have the guts to tell you? That is why you need to do this......and then u can go on from there.....

__________________
Appreciate the good times and learn from the bad times....