Yes, Gavin did break up with Blake for that very reason - because he was still closeted. The fact that Blake wouldn't let Gavin be physical with him in public is the reason why Gavin made that comment - plus, Gavin was jealous, seeing how Blake allowed Ben to hold his hand in a public setting. So, Gavin said what he said because he knew it would hurt Blake.
As far as Chris being so angry about Gavin showing up, Blake told Chris all about Gavin, remember? Gavin pretty much destroyed Blake when he dumped him. When Blake finally came out to Chris that night, after the football game, Chris was really there for Blake. Helped him get over Gavin, just by being a great friend.
Thanks for the support! Means a lot. If you ever have any questions about the story, just ask. I'll try to reply ASAP and shed some more light on the matter.