So, there's this girl that I like, and I think she likes me also. We met a few years ago and were just OK friends, but now we've become a lot closer. She calls me almost every day wanting to hang out, and I keep refusing because I'm so confused. Prom is approaching, and when I decided to feel her out about who she wanted to go to prom with she said that she really wants to go with this other guy. Is she just playing mind games with me? Should I ask her to prom?

If you don't ask her you will never know, and keep wondering "what if this" and "what if that".
You have nothing to lose by asking her, if you think about it ;)
Good Luck