it's a shitty situation, no doubt. but i gotta say, getting involved in her problems with her boyfriend is a bad idea. their problems are none of your business, to be honest. if he was a close friend of yours then i'd say, go ahead and tell him. but it doesn't appear that he is, so i'd stay out of that.
someone here said that there's probably an underlying problem that is surfacing because of his drinking. i agree that there probably is one because i can have an entire bar full of martinis and still not tear down or hurt my boyfriend. you're in school, right? there may be a jealousy issue. alot of men are secretly jealous when their women are succeeding, but very few will voice it without being under the influence of something. he may be afraid that you won't think he's good enough for you...the possibilities are endless as to what the underlying problem might be.
i think, though, since you've already given him a chance and you're worried that he isn't being faithful; it isn't worth finding out. it's good that he denied her this time...but you said yourself the trust is gone. is it really that easy to regain trust? to deny something once when you have accepted it several times before? some things are better left unsaid, and some things are better left unknown. seems to me your best bet is to go to him, tell him it's over (and why) and then just cut your losses and move on. there is no excse for him to have done what he's done, period.
it'll be hard because you feel (felt) so strongly about him, but trust me...you will move on and you will find better. stay strong and keep your head up, there's a whole world out there.