Ok. Well. Attempting to bypass the argument but not confident...
DS (nearly 11) has preferred dressing up (as opposed to dressing) as a girl since he was about 2. Whenever there is an opportunity, he is in a dress and preferably high heels. (no not the heels when he was 2.) And I really, truly, didn't think much of it. Sometimes DH and I used to smile wryly and tell ourselves he was gay, and I used to laugh at myself as Edina in AbFab, (nb this is a JOKE based on an understanding of what other people's assumptions would be!) but he got no stick at school and i was brought up not to think it was a problem, all my subsequent life experience and training said it wasn't a problem, etc etc. Also he always seems to have a girlfriend, so I'm trying not to assume I won't have to make way for another female...
We moved over the summer and he returned to his old mates for a birthday party sleepover in his new dress. All the kids from his old school ran out to meet him, calling his name, delighted to see him, nobody even NOTICED the dress as an issue. He wore it all sleepover and it was just a part of him.
But over the summer his SS had a birthday party which she said was going to be dress-up. He planned his dress carefully - but when we got there we discovered nobody had bothered (this is not allowed where i come from, btw, dress up is dress up and no bloody arguments). He was GUTTED and I had to give him my trousers to wear - which were miles too big - and I had to wear his dress (do NOT ask). He knew it would be noticed by his SS's circle of friends and other family.
And at his new school - where the incidence, say, of neck tattoos is far higher than at his previous one (which I should point out did have a very high proportion of VERY entrenched views of one kind or another)he went to his Hallowe'en disco as the Corpse Bride - of course - and just got trouble all evening for it.
I guess the thing for us is that he has shown a clear preference from an early age for a particular style of dressing. It's only now that it's become a problem for him, and it wouldn't be if we were still living in the place we were before. We have bought him David Walliam's book 'The Boy in the Dress', for Christmas, and we discuss the fact that the 'problem' is entirely with other people, and he accepts this. This is something which is visible and obvious, but there are plenty of other things, subtle differences, that other people will pick up on and have a go at because of. Part of preparing children for being adults is helping them to be striong, to be themselves, in the face of lack of understanding, and yes, even hostility from those who do not understand and who are horrible to difference. Not to avoid argument and dissention at any cost. It's not the first time your child will face the chance of other kids (and parents) being horrible. That can happen at any time. The real question for you is how you pick your battles, and how you deal with the fallout. if you don't think he's up for it, and you are not up for it, don't let him wear the dress. if you think it's time to explain a bit about the inexplicability of people, and/or you think his sense of self is strong enough, let him wear the dress. It's not about normal or not normal, it's about development.