I had a friend over we both had to sleep in my bed. when I woke up his hand was up my boxers and in my crotch. I had an erection and I felt his. are we gay or was I just in the wrong place?

If he was asleep AND you just woke up and discovered it, there is no problem. You both were in an embarrassing situation, that's all. The body will do things that the conscious mind wouldn't . Your subconscious mind will do it's own thing while you're asleep, and having an erection because another body is close by is not unusual. One sees this in children who are obviously too young to even know what sex is.

If your friend was awake and feeling you up, then it's time to get another friend if you don't want to explore this avenue. He obviously wants to AT LEAST have a mutual masturbation session...possibly more.

The fact that you are uncomfortable with the whole situation would indicate that you are not gay. If you were, this would not have made you uncomfortable. Having an erection in response to manual stimulation is normal, especially when asleep. Waking up and not being happy with how that stimulation happened is a pretty strong indication that...if you are gay...you are definitely not ready to do this yet. But the odds are, you are not gay.

Short answer....wrong place, wrong time. Don't worry about it. Just don't invite this friend over again if you suspect he's crushing on you.