I can't see any way around it, at this point you're just gonna have to come clean and tell them the truth. You're right, refusing the DNA tests and cutting them off is only going to make it look more and more like you cheated, that is the only conclusion they would possibly draw from that behavior (and you would feel the same way in their situation).

Even if you do that, eventually the kid is going to learn about recessive genes in 7th grade biology class, figure out he isn't related to his dad on his own, ask you about it, and then you'll just go through all this again with him and then the in-laws are gonna find out anyway.

I just can't see any way around them eventually finding out what happened, so might as well just rip off the band-aid now and deal with what comes. Even if it sucks, it's better than cutting them off and them thinking you're a cheater. Sorry you're going through this.