How to deal with this admittedly true rumor?

I am sorry to hear what you are going through. I have been in a similar situation to your and it really sucks. Why is your friend telling her sister, or anybody for that matter, in the first place???? I would never talk to her again after embarring you like that. And tell everyone else to shut up, piss off, and leave you alone, and that it is nobody's business but yours and his. If he walks away when you are around then that most likely means that he isn't into you i'm afraid. Just ignore everyone else, and just act normal, I know its easier said than done, but it will p over time. Try saying hi to him here and there and that should make him feel more inclined to not walk off when he sees you. Good luck and I hope things get better for you. Take care :)))