The Department of Defense made history in June 2012 when it conducted its first official ceremony to mark Lesbian, Gay, Bisexual and Transgender Pride Month.

It began with the assembled crowd singing of the national anthem, followed by opening remarks from President Barack Obama who, less than a year before, oversaw the repeal of the military's policy against openly gay service members.

Then-Defense Secretary Leon Panetta spoke next.

"As we recognize Pride Month, I want to personally thank all of our gay and lesbian service members, LGBT civilians and their families for their dedicated service to our country," he said. He went on to applaud their professionalism and courage, adding "now after repeal, you can be proud of serving your country and be proud of who you are when in uniform."

Notice the "T" in that acronym only applies to civilians. Panetta's very particular choice of words highlights an ongoing inconsistency in how the military treats sexuality versus gender identity: Transgendered troops may not serve openly.

This ongoing discrimination was brought to the forefront of the public debate earlier this month when former U.S. Navy SEAL Kristin Beck formally announced she was giving up living as a man, Chris, to embrace what she felt is her true identity.

Her book, "Warrior Princess: A U.S. Navy SEAL's Journey to Coming out Transgender," highlights her experiences serving with distinction in one of the military's most elite units before retiring in 2011. The veteran of operations in Afghanistan, Bosnia and Iraq could not serve under current military policy.

Beck told CNN she left the military because she wanted to live her life and be happy. She also claimed that she could have been attacked for coming out within the ranks.

"There's a lot of prejudice out there. There's been a lot of transgender people who are killed for prejudice, for hatred," she said. "When the book came out [there were] some amazing support and some amazing praises but also some pretty amazing bigotry and hatred."

"DoD regulations don't allow transgender individuals to serve in the U.S. military, based upon medical standards for military service," Pentagon spokesman Navy Lt. Cmdr. Nathan Christensen says.

The Pentagon's Medical Standards for Appointment, Enlistment, or Induction in the Military Services includes among its list of reasons for disqualification "transsexualism, exhibitionism, transvestism, voyeurism, and other paraphilias." That clause is wedged between anxiety disorders and alcoholism and drug abuse.

(Paraphilias are patterns of recurring sexually arousing mental imagery or behavior that involves unusual or especially socially unacceptable sexual practices, according to Merriam-Webster, such as sadism or pedophilia.)

"Don't Ask/Don't Tell was repealed to end discrimination against service members on the basis of sexual orientation and identity," Rep. Keith Ellison, D-Minn., wrote in an email to U.S. News. "There is a 'T' in 'LGBT'."

Ellison has been among the most outspoken members of Congress on this issue, and is vice chairman of the Congressional Lesbian Gay Bisexual Transgender Caucus.

"Transgender Americans should have the same right to serve their country that we can afford all Americans," he said.

OutServe-SLDN is a legal network that supports efforts to promote equality in the military. It has set up a guide for transgendered people considering joining the military, and points out the disparity in Pentagon policies.

"By repealing DADT, the country and the military have taken a significant step toward equality for all who want to serve their country in uniform. But there are other discriminatory policies in the military that the repeal of DADT does not change, including the medical regulatory ban in place for aspiring or current service members who identify as transgender," it states.

It points out that any signs of genital surgery could be grounds for dismissal, and offers advice for serving "in the closet," including what to do in the case of military discharge.