The Michigan’s Womyn’s Festival (though, amusingly, it’s spelled “Women’s” in many mainstream news outlets, despite it being a proper noun) began admitting openly transgendered people in 2006.
For fifteen years before that, there was a policy of excluding those who had not “lived their entire lives as womyn” – though in 2001, they stopped interrogating attendees to prevent a climate of harassment against transgendered people in an attempt to search out transsexuals. The rationales for excluding male-appearing (or later, any transsexual) persons are exhaustively listed at this webpage, and are also handily debunked.
This is a perfect example of how transpeople – moreso than bisexuals – bring the entire sexual categorization scheme into question. They are the proverbial black swans that show that our societal model of sexuality is flawed.
While researching an annotated bibliography, I discovered that over 38% of transgendered people identify as heterosexual – but what does that mean? Are they talking about heterosexual experiences from the point of view of their birth sex, or the gender they identify with? I understand now what was meant , but as my first real run-in with this kind of thing, I found it all confusing, disturbing, and unsettling.
But it’s good.
Once we question, once we don’t know what has meaning anymore… well, then, all that’ s left are the meanings and relationships we make for ourselves. Maybe it’s time we focus on those, instead of categories.
 For those that don’t know, it’s most commonly the relationship between the target gender and the significant other that’s meant with sexual orientation. So a male-to-female transperson who is attracted to men can be considered heterosexual. As with most things regarding transpeople though, you will almost certainly find exceptions.