This article from Daily Halacha by Rabbi Eli J Mansour discusses the case where the torah service started with a minyan and then somebody left. In that case, he writes (without citing sources, unfortunately):
This Halacha [referring to continuing after you've started the first aliya] applies only if a Minyan was present when the first Oleh began reciting the Beracha of “Asher Bahar Banu.” If the tenth man left while the first Oleh recited “Barechu,” before he began reciting the Beracha of “Asher Bahar Banu,” the Torah may not be read.
If even for the case where you started with a minyan you would stop if you lose the minyan before the opening b'racha is completed, then it seems logical that if you never had the minyan in the first place you would not continue past this point upon discovering the problem.
This article from DinOnline addresses the question of reading l'hatchilah without a minyan for the purpose of educating minors. It cites the Mishnah (Megillah 23) for saying that a minyan is required to read torah. It then addresses this chinuch case and says that you still shouldn't but there is room for leniency without the b'rachot. It then adds:
[A] number of commentaries understand that the reading from the Torah is considered a davar she-bikdushah specifically because of the recitation of Barchu and the blessings before the Torah. This is stated by the Meiri, by the Kesef Mishnah, and by others.
According to this, reading from the Torah without Barchu will not be a problem, even where ten men are not present.
(It goes on to talk about reading for learning versus reading as d'var sh'bikdushah, but I don't think that applies in your case.)
This article from Torah Musings by Rabbi Michael Broyde talks about women's torah readings (without b'rachot) and argues that it is inadvisable but not strictly forbidden.
Since the lack of the minyan was discovered before the torah reading began, according to the first you don't read and according to the second and third you might be able to read without the b'rachot (though this is not advised).
None of these address what to do with the sefer torah that has been taken out but cannot be used. But the cases of both the school and the women's group do, of course, use a scroll, so those are cases where, l'hatchilah, a sefer torah is read from without performing the mitzvah of kri'at torah.
Possible counter-argument to which I have no answer: the children and women are still Jews, while the gentile is not. Maybe that makes a difference.
Conclusion
This is my own reasoning based on the above.
If you knew you didn't have a minyan then you wouldn't have taken out the torah, but you discovered the problem too late.
There are cases where, strictly speaking, you can read from a sefer torah without a minyan, without b'rachot (education of children, women's readings), though it is not advised l'hatchilah.
Halacha is generally more lenient for a b'diaved situation, and honor is due to the sefer torah that is already out.
My conclusion: read a minimum amount from the sefer torah for the explicit purpose of education, without b'rachot, and then put the scroll away and proceed as normal when you lack a minyan.
Finally, take steps to reduce the chance of a recurrence. Instead of waiting for the start of the torah service to ask a visitor to accept an aliyah, consider asking anybody you don't know whether he is a kohein, levi, or yisrael as soon as possible after he arrives.
