Here's how I did it:
"Wow, I really appreciate that, and if I were gay, I would totally take you up on it, because you're a really good-looking guy. But I'm afraid I'm straight. Sorry."
Also, I should say, I once spent a summer a long time ago working near the beach in Santa Monica, and I got hit on SO many times! Apparently, gay blond surfers have a real thing for big hairy Jews.... I did the polite rejection thing so much...and none of the girls I hit on ever were interested. Once, this dude hit on me, and I said, "Listen, I'm really flattered, and you're clearly hot, but I'm not gay. Whatever it is you see in me, could you maybe go over and point it out to that redheaded girl over there?"
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Dull sublunary lovers love,
Whose soul is sense, cannot admit
Absence, because it doth remove
That thing which elemented it.
(From "A Valediction: Forbidding Mourning" by John Donne)
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