FWIW Ray, I think you did the right and honorable thing, telling her in person what had transpired. I think that in some situations, the personal approach is necessary, and she will likely respect you for your effort.
I hope it all goes well with your new lady friend, sounds like a great start to a (hopefully) long and enjoyable relationship.
So when are you going to get her on IW and introduce her to the "family"?