It sucks to lose a friend but you are doing the right thing. Even if his jokes were not sick (and they are) they are in really poor taste and they trigger you to the point that you are becoming ill. Your job is to protect and take care of you...

Get rid of dude and if his wife can't see her way clear to have a friendship that does not involve her hubby get rid of her too (sorry, I know that sounds mean).

Take care of you,
Jet