First up, I know this borders on chump behavior, because I'm newly single (a few months) and am already kinda "hooked" on this girl. Ugh.

Long story short, we met through mutual friends and clicked right away, turns out she was seeing this guy that I peripherally knew (friend of friends) but the first time we talked alone after a club we talked for 3 hrs and she said she wasn't sure what was going on with him, etc.

She gave me her # and we've hung out in groups a couple of times, but I make a point to keep my distance because I don't want to be her buddy. I've run into her randomly while I'm out at a few local spots, and two groups of friends made plans to hang out once or twice, but that's it.

Anyway she pulled me aside once to tell me that she broke it off with this guy, and I probably should have had a more aggressive / obvious response but I just played it cool and shelved it for the night to make some formal plans. A few days go by and we're talking more and more, I drop in at the bar we tend to see each other at and the guy is there, arm around her like everything's back to normal.

I didn't bother asking, she almost had this guilty look on her face.

Anyway, she is not an option right now because I don't know what's going on with her on/off thing with this guy, and I don't want to get in the middle of it. However, she is great, possible LTR material, and I want to keep her interested without falling too far into the friend zone. Any advice? Should I just make a point to say hello when I see her out and keep it at that?

Just completely ignore the other guy.
I'm more or less in the same situation with an amazing woman.
Just play your game, like the other guy doesn't exist.
If you see her at a party, dance with her, hug her and kiss her... try more than once if you have to. However, don't go into it too aggressive, take it slow enough, build the excitement step by step...
If she brings up the other guy in a conversation, don't say anything, just hug her and then tell her you stay away from toxic relationships, and that she should as well...
It works for me..
I read between your lines that you are 2 seconds away from the friend zone... Don't accept it!
Take destiny into your own hands.

I always felt like trying to take a girl from a dude was a ballsy expert maneuver, but you're right, I should keep on like I was before 'cos it was working. I backed off because I felt myself getting too emotionally attached, and after I'd see her out I'd come home and couldn't get her out of my head for a couple of days.

Thanks for the nudge in the right direction!