It's definitely season 1. I was just watching it on dvd for the first time, and I remember seeing this.
I'm pretty sure it was episode 16, "Corky Rebels": http://www.tv.com/shows/life-goes-on/corky-rebels-58596/
Libby & Drew are volunteering for the local church-- for a type of talent show. Libby has a singing number. Then a former high school classmate of Libby ("Frankie") , who plays the piano joins forces with her, and they have a singing dance number. After one practice, Frankie says something to the effect that he should never have stopped dating Libby. So Drew asks Libby before turning out the light, about them dating. She says it was only one date. Anyway, he turns out the light, and his eyes glow green (with envy).
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