I was watching that episode last night when Peggy went to Mexico and tutored the kids of that Mexican actor she has a crush on. As much as I don't care for Peggy I actually felt sorry for her when that guy said "he would never want Peggy as a lover" right in front of his wife. I actually felt sorry for her at that moment.
Did Peggy feel sorry for Hank when he was suspended from teaching shop? Nope. Hank was crushed and Peggy jumped on the opportunity to win the Substitute of the Year Award. I didn't feel sorry at all for Peggy when he said he would never have Peggy as a lover. Peggy ego is huge and she can also be very selfish. She needed to be brought down a couple of notches.
I didn't feel bad. She was asked to go to Mexico to be a tutor. However, she was over-embellishing everything that he was doing by thinking that he has fallen madly in love with her. Men do not do mind tricks. If he likes a woman, he will flat out tell her.
Also, why would Hank's lack of emotion suddenly bother Peggy? She knew what she married. He has always been like that. He is not going to change how he does things.
Though I agree with everything said about Peggy's massive ego, I still felt sorry for Peggy. The actor and his wife were particularly cruel to her; Peggy hadn't done anything to them to warrant that.