So When did Edge tear his pectortial muscle?
 

I was under the impression that it was during his Mardi Gras celebration, in which Kane interupted, but however after watching it, it didn't seem like he was showing any signs of pain, was it during this skit or was it at an house show?

I had heard that that was where it happened.

It happened when he was rolled into the ring by Kane during the Mardi Gras angle. You notice instantly that he's holding his arm close to his stomach at that moment.