Nov. 11, 2013 -- Paula M. Neira thrived in the U.S. Navy for six years, serving at home and at sea in mine warfare combat during Operation Desert Storm, culling numerous awards.

After leaving the military in 1991, she went to law school and then went on to become a registered nurse and educator at a major hospital in Maryland.

But Neira is transgender, and during those years of decorated service she was known as Paul, and all her military records reflect that name.

Today she lives openly as female, but her name and physical appearance don't match her discharge paperwork, or what the U.S. Department of Defense calls the DD-214.

That paperwork is used to obtain employment preferences, as well as medical, dependent, funeral and other veterans' benefits.

"It opens you up to abject discrimination," said Neira. After giving up her naval career and transitioning to a woman, she had two job offers rescinded from potential employers who learned about her gender change.

And now, at age 50, Neira worries that when it comes time to be buried in Arlington National Cemetery with both her parents, her tombstone will not reflect her true identity.

"When I die, I want my correct name on my tombstone," she told ABCNews.com. "I can clearly see some bureaucrat saying, 'Well the name on the DD-214 is Paul,' when my survivors have to demonstrate my eligibility to be there."

Neira and others are calling on the Obama administration to allow transgender military veterans an opportunity to change their DD-214 to reflect their current legal name and gender.

Working with the National LGBT Bar Association, these transgender veterans are making a formal request to the Department of Defense to change the gender and the name on their own DD-214s.

"It is the record of your active duty service," said Neira. "It lists your military specialties and qualifications, any military awards … and displays the characteristics of your service, honorable or conditions other than honorable."

The association argues that veterans may be denied access to benefits and services when there are discrepancies between what appears on the DD-214 and on court orders, state identification cards and revised birth certificates.

They say there may also be "embarrassing" encounters in which transgender veterans have to "out" themselves to officials.

"I believe this is a no-brainer," said D'Arcy Kemnitz, executive director of the LGBT Bar Association. "I believe the Department of Defense wants to do everything possible for those who have worn the uniform with honor and distinction and have sacrificed for our country."

She said transgender veterans should be able to make a name change on any legal document that requires their name. "It's simple, and there is less paperwork."

Kemnitz said women like Neira have served their country well: "Paula is a very modest woman. She drove ships in the Navy and then went to law school and was one of the top in her class. … She is an extraordinary example of a veteran of the armed services, and now she is using her nursing degree to help people."

But Defense Department spokesman Lt. Col. Cathy Wilkinson said in an email to ABCNews.com that there are "no plans at this time" to make changes to its policy.

"It's a historical document that reflects a summary of military service," she said. Each individual branch of service issues the DD-214 in accordance with

This is a specific example--replace what's inbetween quotes.s/corres/pdf/133601p.pdf" target="_blank">overarching guidelines from the Department of Defense.

The military does not allow those who are transgender to serve openly.

But Kemnitz said veterans are asked for the DD-214 "at every turn," unlike college transcripts or other documents. "Every single time you go to avail yourself of something, it shows you have been in the armed services. It's evidence."

Already the Air Force allows such revisions, though the other branches do not, according to Kemnitz.

"They have set the right tone and the way forward," she said. "We want the other branches to do it -- one uniform way."

An estimated 140,000 of the nation's 26 million veterans may be transgender, according to the Williams Institute at UCLA School of Law.

It is hard, though, to determine exact numbers, because so many transgender Americans are closeted, according to the LGBT Bar Association. But the 2011 National Transgender Survey estimates 700,000 Americans are transgender, and about 20 percent of those interviewed said they had been in the military at some point in their lives.

"Frankly, we don't know how many they are," said Kemnitz. "But we know in the armed services there are a disproportionate number of individuals [who are transgender]. If you are questioning your gender, where else do you find clarity?

"If you are a woman in the military, they tell you how to wear your hair," she said. "If you are a man, they tell you how long it has to be and if you can have facial hair. They tell you what your gender is."

When Neira graduated from the U.S. Naval Academy and went on active duty in 1985, she was "questioning" her gender but not her commitment to military service.

As a lieutenant, she received three Navy commendation medals, an achievement medal and other service ribbons in a warfare task group cleaning out sea mines in the northern Persian Gulf.

"I knew something was different -- I had an inkling," she said. "I felt female, but was not ever able to accept it."

Neira said she came to realize while on active duty that she would have to start dealing with her gender nonconformity, but knew she would be thrown out of the Navy.

"You are going to be discharged," said Neira. "You don't have the ability to ask for help. You have to hide it from the government."

In the 1980s women were not allowed to serve on the destroyers and frigates where Neira worked, but that law changed in the 1990s.

Even the repeal of Don't Ask Don't Tell, which allows gays and lesbians to serve in the military, could not have helped her.

Being transgender, or what the military calls a "psychosexual condition," is considered a medical disqualification.

Neira transitioned at the age of 28 after she left the military with an honorable discharge. With her law degree, she went on to fight for the repeal of Don't Ask Don't Tell and now works to ban discrimination in the military she loved so much.

"The hardest decision I ever made was leaving the Navy," she said. "Accepting myself as a female and dealing with transition was easier than having to give up my calling."