You can always say that somthing came up..Somthing has come up after all, and you can't make it.
If you decide to go, you can always play the tired part. For me that works well because I don't have to play; after two beers I am pretty groggy. (doesn't seem to apply to margeritas or coronas thoguh...)
Another thing, he might take it better in your case because you are FTM.
However the thing is, I have come out to a lot of people who I thought were going to take it horribly. One guy from Texas who was this baiyu raised cajun, and definite macho guy from a catholic family took it fine.
Sure, when I was working with him, and was not out, he gave me all kinds of sh!t for being girly or not lifting like a man, or whatever, but when I finally told him at the end of the job, he was just suprised, but cool. He had a few questions about it, but was real cool about it.
Other people who I didn't think would have much of a problem turned out to be a real pain.
I guess the thing is you never can tell.
As far as his homophobia is concerned, must phobic guys tend to be afraid of gay guys. Likely MTF's too.
Another thing you can do is mention to hem when it comes up that you just not really into that, that you're looking for a more long term relationship. If you are Bi or into girls you can indicate that you are looking for a girl.
The bottom line is you are not gay just because you might feel uncomfortable banging some chick. She's probably the village bicycle anyways, you wouldn't want to. LOL
But no, I had friends like that occasionally when I was still out as a guy, and I didn't have too many problems with it.
Just be confident. REally. They are questioning your masculinity!??
"whatever, dude, what floats your boat..." that's how you got to carry yourself in that kinda situation.
That you got complete confidence. This dude wants to question it? Whatever. "have fun dude" is all you got to say.
You're a guy. Don't show any weakness, emotion about it, other than slight amusement that he might suggest such a thing. Be confident, almost arrogantly so.
That should pass you well enough for the night. Go do somthing else durring the party.
Edit:
This is actually the most effective way I ever found when handleing those type of guys. If it comes up and they suggest anything that might chalenge your masculiniy: just laugh. Like it's the most absurdly funny suggestion you have ever heard. Then if you need to I'd follow up with some teasing sarcasm: "Oh yeah, I'm gay alright,(laughing), let me just go find my hotpants...?(can't sop laughing) " lol and keep laughing.
That ought to shut him up pretty quick..