I agree that telling your girlfriend doesn't help anyone.
It sounds like the bottom line in all of this is that you are afraid. You are afraid your gf's sister will tell her and 'make you look bad' so you're having the urge to do damage control before the fact. But your 'damage control' could potentially cause much more damage than if you just allow the situation to unfold as it will, especially since it may never unfold at all.
As MB said, you didn't do anything wrong. Be utterly confident in this and absolve yourself of any blame. If her sister really is twisted enough to make something out of this, then remember, your girlfriend has known her sister her entire life and probably has a pretty good idea what she is capable of.
In any situation, when choosing whether to "spill the beans" or not, these are some thoughts to consider:
1) Is your primary motivation to help yourself (i.e. relieve fear, relieve guilt), or is it to help the other person?
2) Will disclosure do more harm than good to the other person? There's a difference between leveling with someone and leveling someone.
IMO, it's important to be honest whenever you can, but there are some things that are better left unsaid, and some times when the kindest choice is to lie.
Some examples:
(better left unsaid):
Me: Your crew foreman is really hot. I'd like to fuck him.
TM: I really didn't need to know that.
(appropriate times to lie):
Woman: Do you think my tits still look good?
Man: Yes.
Co-worker (one that you like): Do you think my new haircut looks stupid?
You: No.
Sometimes I lie, I'm not sorry, and that's the God's honest truth! :biggrin1: