I think that here he is asking genuinely if she is telling the truth and then later in the scene uses its alternate meaning of virtue.
Next he asks, "Are you fair?" This word could also have a double meaning in this text. It could mean fair as in beautiful or it could mean fair as in giving proper justice. Ophelia is clearly confused by these two homonyms as she simply asks, "What means your lordship?" He replies, "That if you be honest and fair, your honesty should admit no discourse to your beauty." I think that he is saying that, if she is really breaking up with him, he expects she would be a little sadder or look more distraught. When she answers, "Could beauty, my lord, have better commerce than with honesty", Hamlet seems to go on the defense and uses the alternate definition of honesty meaning virtue or morality. He says that the power of beauty will sooner transform honesty from what it is to a bawd, or prostitute. I think that he is attacking Ophelia for being a woman and her using such charms as beauty to mask the cruelty of hurting him. Hamlet already has a low opinion of women due to his widowed mother's hasty marriage and now Ophelia breaking off her relationship with him so suddenly must really make women seem even frailer.
When he continues, "this was sometime a paradox, but now the time gives it proof", I think he is saying that their relationship has puzzled him for sometime but now he sees where they stand, which is to say it is over. He then tries to instill guilt by telling her that he did love her once. When she responds, "Indeed, my lord, you made me believe so," he takes it as a challenge. He snaps back by saying, "You should not have believed me, for virtue cannot so inoculate our old stock but we shall relish of it, I loved you not." I think he is saying that he deceived her and that their old stock, or sins, cannot be inoculated, as in an inoculation where a virus is injected in order to build up immunity, with virtue as to make them forgivable.