I feel that a chapter should not discriminate against ANYONE, including gays. We have had at least a couple of gay brothers in our chapter over the past 10 years or so. One of them didn't come out until his final semester, and even then it was only to a couple of brothers. The other one didn't come out until after he graduated (although most suspected he was gay anyway). Still, for the most part, both of these brothers were discreet about their orientation, and an outsider might not have guessed that they were gay.
There is one thing to consider though, and that is the reputation of your chapter if someone is especially flamboyant, or hits on other guys in public while wearing your letters, goes to parties dressed in drag, etc. Even if that person's fellow brothers like him, think he's a good guy, etc., people from other chapters may form an opinion of your house and spread rumors that may hurt your chapter's reputation. People might start forming general opinions of your house as a whole, and that could hurt your chapter in terms of social aspects and especially membership.
While a house should not kick out or ostracize a member because of his sexual orientation, I wonder if it would be in the chapter's power to ask that member to "tone down his act," or if that would be considered infringing on his rights.
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