Good on you for not accepting the Les Paul. That was the right thing to do.
I also disagree with >>18. Telling him you just want to be friends isn't leading him on, it's presenting what you want out of the relationship, and he is free to take or leave that as he wants. Just be very clear that that friendship is all you would want.
But because life isn't that easy, and because like I said before it sounds like he's not really listening to you, it's likely a situation will arise where he'll say he's okay with being friends, but is still holding out hope and expectations. Just be cautious and watch out for it, you know?
Negotiating relationships is hard. I sympathize with you, and I just hope things work out okay and you don't end up the bad guy in all of this, as is so often the case.