Good to know that at least that bit of him would be OK :-).
What has happened in the past when you have confronted him about lying (the times when it wasn't something that he was wrong about, but that he deliberately lied about)? Has he ever shared his reasons for lying, even if it's 'I don't know why I did that'?
Compulsive lying often stems from insecurity. As I said in my previous answer, I think he is yearning for acceptance – he might be afraid of rejection (whether the fear is rational or not). However, he is clearly going about it the wrong way.
Sometimes persons with ADHD or bipolar disorder might start lying compulsively to cover up things. Psychological disorders such as conduct disorder and antisocial personality disorder often involves compulsive lying. With conduct disorder one also finds other forms of deceit.
However, to be sure, you will have to get a professional opinion and be prepared to provide more details.
Does his behaviour involve other socially unacceptable acts (e.g. bullying, cruelty towards animals or humans, conning people, or stealing), or is it just the lying?
Do you perceive him as someone with empathy for others?
It is very hard to remain friends with a compulsive liar, but, if his lying is rooted in a more serious issue, he or she might not be able to control it. He or she will often need professional help.
Have you pointed out some of the lies to him in the past? Try gently pointing out lies by saying things like 'That doesn't sound quite right. Are you sure that really happened?'
You might want to confront him about his sexuality and say something like this:
'If you really are bisexual or gay, that is totally fine by me. I have already accepted you as you are, since you've always been you, whether I knew every little detail about you or not. However, if you are only saying it to get some kind of reaction, don't expect anything different from me. Whether you are gay or bi or straight will not change my behaviour towards you. But lying to me will probably just damage our relationship, causing us to drift apart, and making you feel rejected – which is something that both you and I would probably want to avoid. It is safe to tell me the truth. You're stuck with me, I'm afraid – no matter what the truth might be. Keep it real, and you will have a real friend in me.'