I know what you mean. I was in a similiar situation before. It's going to be hard, but if you are hurting because of all of this, then you need to do whats best for you.

You could flat out ditch her. It might hurt for a little while, but you would eventually get over it. The only problem I see in that is the fact that you guys have mutual friends.

You also might try telling her how you feel, and being very bold and addressing something to the turn of "him or me, pick" and so on. Who knows, maybe she likes you too, but she's just waiting for you to get some balls out, and tell her that you want her.

Just remember, the ball's in your court. What you do with it will determine the outcome of your position.