Really, if Erfworld societal norms follow Stupidworld societal norms as a function of time (they...sorta do), then bear in mind that during the castles-and-armies era of Stupidworld, there really was no such concept as a "gay person." The idea of someone being exclusively homosexual was just not even thought of. There were men, and there were weird men who were cryptic about how they spent their free time. The idea of a person being homosexual as a quality rather than just as an activity only really popped up in the last century or so.
Of course, I didn't read this whole thread, so someone probably already said all this.
Also? Effeminate =/= gay.
Edit: And I disagree with the characterization of Tramennis looking silly in his tankeroo. Yes, on one level he's in a hopping bouncing stuffed animal, gaily sashaying his way into the city. But consider also that he rides back in flush with victory over GK's column, and almost all of his silly-looking units are still standing. Gotta respect that even as you giggle behind his back.