I don't expect church leaders to be sinless, else we'd have none. But I expect they'd hold a higher standard. I think 1 Timothy 3 clearly supports that notion. Your friend should have the grace to recognize that he's setting an example as Sunday School teacher and step aside.
Heck, I've flown pretty darned straight since I got saved but with my history, even before that, (and my tattoos) you won't catch me teaching Sunday School. I'd love to and I think I'd be great at it. But ain't gonna happen.
You know what I do instead? I organized a group of recovering homosexuals in my community, under my church's banner no less. I helped repair the church after Katrina, waded in there and put my butchy tomboyishness (and my tools) to good use. I lug the boxes of food out of the truck for the little old ladies we deliver to on weekends. Heck, I serve as a living witness to all kinds of different things. You have no idea how many times I've heard, from over my shoulder somewhere, "Have you met, Mary...? Here she is. Mary, tell us about..."
Okay, that last one's a major pain in the butt. But what are you gonna do?
I, me, myself, would accomplish less as a Sunday School teacher. Why would I ever do that? I leave that to someone who can accomplish something with it.
I think I'd be justified in wondering why exactly your friend is teaching Sunday School. It doesn't seem to be with anyone else's benefit in mind. If that was their concern, they'd be doing something else.
1 Corinthians 12:20-26 (New King James Version)
20 But now indeed there are many members, yet one body. 21 And the eye cannot say to the hand, “I have no need of you”; nor again the head to the feet, “I have no need of you.” 22 No, much rather, those members of the body which seem to be weaker are necessary. 23 And those members of the body which we think to be less honorable, on these we bestow greater honor; and our unpresentable parts have greater modesty, 24 but our presentable parts have no need. But God composed the body, having given greater honor to that part which lacks it, 25 that there should be no schism in the body, but that the members should have the same care for one another. 26 And if one member suffers, all the members suffer with it; or if one member is honored, all the members rejoice with it.