Folks, I think the easiest way to handle this is to recall Polo and the "butt-hurt" business. Nothing wrong with the phrase - it was the way it was used, which was as a personal attack. The easiest way to discern if it's a personal attack is to look to whether the comment in which the alleged insult was made advanced the discussion or was simply a "shot" at the poster. If the former, no harm. If the latter, time to take action - a PM or gentle reminder (at least at first) to attach the post and not the poster.
Now, having said that, in the Woodshed it's kind of an "anything goes" setting, and people opt-in to the Woodshed. They are warned to have a thick skin. All we've outlawed in there are threats, libel, bigotry, and inappropriate sexual content. While I personally find the "You're gay" thing offensive and unnecessary, it's been part of the fabric (see the threads - in jest, admittedly - in which you pick a member and say something bad about them) of that sub-forum.
Where we would draw the line in the 'Shed is if it becomes harassment - someone constantly going after a member and alleging he or she is gay. Outside the 'Shed, it should be addressed immediately if it's used for a personal attack.