>Now, I'm starting to look for my next gig. I imagine prospective employers will want to talk to my previous CTO as a job reference. That will not go well.

Not necessarily.Tell the truth, the whole truth. If they want contact him, you could get a decent/neutral reference, or if it's bad at least the recruiter knows what to expect, and can try to see if it ads up with what you said.

I rarely needed to give references for a job anyway. you can definitely get a job without any kind of reference check if the interviews went well and they like you