Shannon,
This is an interesting one! I have these thoughts (in the "For whatever it's worth" category):
1. It is your friend's band (I assume), so he is the decision-maker. I think you have an obligation to tell him (if your dressing goes beyond the confines of your own house). That way, he gets to make the decision about the conditions, if any, he wants on you to remain in the band. Perhaps something can be worked out that satisfies both of you? Perhaps your dressing can be incorporated into the band's image? Or maybe because it's the country music industry, he might ask you to choose? If you want it badly enough, you'll stop dressing while a part of the band -- dressing up, after all, IS a behavior we can control. Or maybe he'll ask you to limit your dressing to private occasions?
2. If there is any industry where I would think you wouldn't have to worry so much, it would be the music/entertainment industry. Obviously, the fact that it's county music complicates it somewhat, but then, maybe this would be a unique niche for the band -- especially if your dressing were incorporated in a "conservative" manner, rather than a wild, flashy "over-the-top" manner that the bands of yore used to do it? What fun would that be for you? And what a boon to crossdressers for folks to see a "regular" guy out there unafraid to dress up and acting "normal." In other words, you could just be like any other number of conservative-looking girls who play country music -- except you're a guy!
Just food for thought. Good luck!
Stephanie