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.