A) I think that is a pretty harsh moral dilemma.
B) These types of dilemmas happen with some regularity in the fiction, so you're totally justified in having such moral conflicts.
I occasionally find myself having to say to my own players "you're almost there - you're doing great" when a particular challenge seems to be confounding them.
I feel bitterpill's suggestion of nudging the player towards some sort of "out" or signpost might be alright. Perhaps have a priest NPC - of his own volition - approach the character, as if God felt there was some way he could help with something, the same way Michael just ends up where he is needed all the time. Don't make it a social conflict to force the PC to unburden himself, though - the player will feel even more out of control if he is forced by an NPC to spill his troubles, and it would reinforce any perception of player-GM antagonism.
The player may simply be "checked out," however, but without talking to him, it will be hard to determine whether this is some external frustration being expressed in-game, or actual dissatisfaction with feeling trapped by the GM.
Say something like "hey, I know this dilemma is harsh, but it happens all the time in Dresden Files. I'm not doing it to punish you or make your own life hard - it is supposed to make the game more compelling, and to give players serious choices to make so that they can grow. There may be ways out which you haven't identified, but this game isn't supposed to be a chess game between player and GM - we all are here to have fun, so if this isn't fun for you, lets work together on resolving it. We can discuss - out of character - how to resolve this dilemma, without the other players. I'm happy to hear your thoughts and help out if I can: just tell me how you envision this ending."