How does 还 function in 快下雪了，我还以为今天是好天气? I am reading a textbook and I already understand that 还 （hai) is used to indicate continuation or in addition to something, but for the following sentence it is not exactly clear. When I read the following sentence I see three meanings:

快下雪了，我还以为今天是好天气 


It will snow soon, I also thought today is good weather.
It will snow soon, I thought today is good weather.
It will snow soon, I still thought today is good weather.


How does "hai" function in this sentence and why is the translation correct for .2 but not .1?

Thank You.
It implies that I had been thinking today is a good day, until I noticed that it would snow soon. 还 means 本来 here, it indicates a continuation of original thought. For no. 3, I wouldn't say it's wrong, but it sounds very Chinglish to me. 

It couldn't be "also", because 快下雪 means bad weather, which is opposite to good weather.