It hurts because your husband has fundamentally altered the terms of your marriage.  Instead of being married to a man who is happy to be a man, he now wants to act out his fantasy of what a woman is.  
What you are feeling is completely normal.  In fact, I would say that his asking you to validate what is to you a painful development--by showing you those pictures--is what is not normal.  Also, I think that you did exactly the right thing by sleeping separate.  In fact, the healthiest thing you can do is continue doing that.