First off, I think you figured out yourself that your friends won't mind that you're behind. While they might seem a bit frustrated having to go back, it will help both of you; I know that there are subjects that I'm only as strong in as I am because I was the first person in my study group to figure it out, so I ended up explaining it, a lot.

Secondly, what Rawhide said. Between the fact that you're facing the potential of being dismissed from the school and the fact that you have so many people who want to help you (friends, grad student, TAs/teachers [see below]), you have no excuse to not be trying. If you don't, you'll deal with what you suggested your friends responses will be: "why didn't you study with us?"

Finally, the TAs/teachers want you to succeed. Unless their completely horrible at what they're doing. I've spent the last 2 years TAing chemistry courses (labs mostly, with a gen chem lecture in there as well), so I'm speaking from the other side here, so to speak. If you go to your TAs office hours, tell them what's going on, and show them that you are willing to put in the effort to succeed, they will do whatever they can to help you. Whether it'll be enough is up to you, obviously, but I have had students (both in my section, and in other sections, since we shared office hours) who came to my office hours regularly, and asked for help when they needed it. Whether you simply sit there and work on stuff, asking for help when you get stuck, or whether you do the work in advance and then go to office hours with various questions to ask, you'll want to show your desire to succeed (yes, you need to convince yourself of that first, but see above for that part). I've found that teachers are very similar, but I don't have personal experience from the other side there, which is why I focused on the TA aspect.

Also, your catch-22 of not understanding the material can be helped a lot by going to office hours. Tell the TA/teacher what's going on, and see if they can give you some things you should focus on. While a lot of classes are cumulative, they aren't equally cumulative; there's more that builds off of some things than others, and some that are really just the end of a chain. The TA/teacher can help you figure out which are the key building blocks, which are the minor building blocks, and which are just the ornamentation.