I smell trouble.

My ex and I dated for two years and broke up two months ago. It was mutual and as amicable as a break up can be, and we're friends now and hang out often. The first couple weeks were rough, but I think I'm over it now.

However, about a week after we broke up, a mutual friend (call him "James") moved back to our town (probably more of the ex's friend than mine). The major problem is that I have feelings for James, and I always have a little. I know they say that if a guy likes you, you can tell, but I'm not sure what to think; at parties, we often end up sitting by each other and talking, and when he's jamming guitar with the guys (all my friends are musicians), I catch him staring at me - then he'll smile or wink at me, or something like that. He makes suggestive jokes sometimes, too. We went out of town together this weekend to visit some friends, and ended up hanging out a lot of the weekend and talked until after 5 in the morning.

I feel like a jerk because I know it's wrong. I talked to a friend about it, and he said that James caught on that I like him, but he said a) he doesn't want to p*** my ex off, and b) he doesn't want a relationship right now (my logic is that at least "a" wasn't "ew, gross!"?). So in the car on the way home, I said that I know he knows I like him, and that even though I don't think the ex would care, I know it's bad; and that I don't want a relationship right now (we both just got out of them) - so he shouldn't think anything crazy about it or be weird (he just said that he thinks he's boring and laughed, I said he's not and complimented him, and then we talked about enjoying the freedom of being single, and so on...).

My questions - a) think it's mutual? b) should I just go with the flow here, or ignore it and avoid him?