Friends close to Jon Gosselin tell FOX411 that the reality show dad was more surprised than they expected him to be when he learned TLC was curtailing his role on "Jon & Kate Plus 8" to make Kate its central focus.

"Jon was taken aback with how quickly everything happened with TLC," says an insider. "They needed to act fast with the ratings slipping, and Kate is the more beloved parent.

SLIDESHOW: Reality stars who refuse to go away.

And though they say Jon is upset, he is also slowly realizing all the mistakes he made since the split, and is ready to move on to his next project with, wait for it....  Lindsay Lohan's dad.

"Now that Jon is free to take on a new job, he's really diving into the idea of 'The Divorced Dads Club' with Michael Lohan," says the source. "Michael has been a friend and adviser through the scandal, and they have mutual friends. Their team is eager to capitalize on Jon's new freedom and lawyers and publicists are working on meetings for Jon. He’s looking at every opportunity available."

But Jon is is still smarting from the beating he has taken in the tabloid press. "He feels remorse and anger, but he does see that he could have handled things in a more mature manner," says a snitch. "He doesn’t think people understand him, and that is the most frustrating part for Jon."

Kate, on the other hand, is on top of the world, say sources.

"To say she is happy would be an understatement. This gives her one less thing she will have to bicker over with Jon," an insider tells FOX411. "The turmoil of the last months was difficult for Kate to deal with and she was in tears many days. The move by TLC gives her a little breathing room even further from Jon. The separation and divorce proceedings have made her feel like she's on an emotional rollercoaster. The new contract alleviates some of her daily stress. It will be a good thing for their family."

That's because Jon will rarely be on camera from now on. "He will no longer film special segments each episode with the kids," says a source. "His time with them will be mostly private."

What a concept! They should do a show about it.