Good for you, PhilsFan!! I can only say that you know your family better than anyone else. How have your parents done in the past when they heard difficult news? Most parents will love their kid regardless, so even if it's disappointing they are likely to be on your side. My sister got involved in something bad her first year in college. Didn't tell our dad and her mom for a couple of years because she was so afraid of disappointing them, but it turned out that (a) they already knew, and (b) all they cared about was that she was okay. Again, you know your family way better than I do.
It's hard to feel that you've let someone down, but it's also good to be able to be truly honest with those you love. I think CrazyBabie has a point that others who've been where you are may have some good advice.