If I asked a guy to the dance...?

Yes it is safe to assume that he thinks you like him, and he probably knew you liked him before you asked him. Yes I think that he does like you. His bad experience with girls and that uncomfortable social situation in which he had an awkward dancing experience definitely makes him wary about going to a dance with a girl. He is probably quite scared that he will humiliate himself in front of you and therefore, make you not like him anymore. Depending on how far off this dance is, it may difficult to change his mind about that. What you need to do though, is allow him a chance to become comfortable around you. Perhaps suggest that you two hang out some time or whatever it may be. Just make sure whatever you suggest won't be too high stress for him.