The biggest problem is that your friend heard it, not you. If your friend is willing to come forward, then I think you should say something. I disagree that the dean will ignore it, it's a big deal because it goes beyond just being a teacher/student relationship. This is a business too, and there are laws against harassment.
As far as the grading thing, I think you're out of luck, he can always say he told you to do something in general, but then you did it badly and hurt yourself.
Arbitrary grading is a bad road to go down, especially if you did poorly. Unless someone who did well is willing to say the same thing, you'll come out looking worse.