Likely the most devestating thing was the death of Ike Bykovsky, but there were a number of things that happened that night that were hard for Homer to handle. The first was seeing Jim and Dorothy and the fact that that shattered his love for her forever. The second was likely the encounter with Valentine because even though he probably enjoyed it and it helped him move on from Dorothy, he knew there was an act of pity to it and that made him sad in a way. But the death of Ike in the mine caused Homer to stop building the rockets. He felt that it was his fault that Ike was there in the first place and it was the rockets that brought him to the machine shop, etc. This is what really seemed to shake him, even more than his father's injury in the recovery effort.