well, it's a rather old fact that women become interesting the instant another man is interested in them. Propably some subconscious "well, if he's interested in her she has to have some qualities". Plus with recycling being so popular, why not recycle a relationship?
In my experience the latter rarely works, though. So relax, lay back and enjoy watching the ex dancing at her attendance and ending up dumped.
Whether you have a chance with her is up to her and yourself. As long as you don't make the mistake to turn unbearable macho just out of fear and insecurity, your chances would appear to be quite good.
Cut back on the mead, though - women don't like the suggestion that a guy needs to be drunk to fiund them attractive. We prefer to be loved and adored by sober men.
If you can find the courage, I'd advise total frankness. Tell her that you have a huge prob with being extremely shy and insecure and that you fear to make a fool of yourself. And how you feel about her BF.
Then either she'll tell you no thanks, I'd rather be friends with you (still far better than nothing imo), or she'll tell you she likes you better (what more could you ask for?). In the worst case she'll say she needs a little time to think it over (leaving you in suspense). In that case, accept it and don't push.