Actually, I saw the film in a completely different light. I was initially impressed by how progressive it was. The aunt was a woman, seemingly by birth seeing how she talks about having Ricky with a man, and she was perhaps the most disturbed indivual in the film. The picture itself tackles teenage sexuality. Throughout, Angela is fascinated by the females, and it's insinuated that she's attracted to Judy. This shows that the film makers were aware that although Peter was raised as a girl, dressing up and acting like one did not change his sexual orientation. I think he was drawn to Paul, because unlike the others Paul was a nice person, but Angela/Peter had little sexual attraction toward him. Of course, as Peter was forced to be girl, and therefore is not a transsexual (although you can argue that he was based on the sequel). That, combined with the fact he was sheltered from society, and never properly dealt with the deaths of his father and sister, made him go on a murderous rampage,
Also, I don't see how having a father who was a homosexual made any baring on how Peter grew up. I think the film makers intention of that scene, as well as the one of Peter and Angela in bed was just to show early instances of Peters budding sexuality. The kids didn't seem bothered that their dad was having relations with a man, and just treated it like a kid seeing a man and a woman in bed together. Plus, the father seemed loving enough in the opening scene.
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