Pardon the long post in your thread, but this was something that really affected my decision to finally just go full-time!
There are a few reasons I didn't fight. One, I was a contractor and did not work directly for the hospital. All outward appearances said I was with the hospital, but I was actually with a medical staffing company. This is actually very common in US healthcare, and elsewhere too...way more than you may think!
Second, after running it by others the advice I hated to hear was that I was just under 90 days, so they can remove employees simply due to the "probationary" period and do not need justificaton. (This is the same back home so it took me at no surprise really).
Finally, I had to find work! I lost that position at a critical point, having been on hormones just 4 months. It was a huge blow. Now I
did meet with the company president and explained to her just what had happened. I also held my employer accountable for money they owed me, and she even gave my Christmas bonus three weeks ahead (which is EXACTLY what that bit about your boss feeling guilty reminded me of...I could taste the guilt!!). I truly understood her dilemma as the issue was not with me, but that the hospital have a right to say "we do not want that person." What went on behind the scenes is easy to speculate, but its impossible to prove. In short, even though my boss knew what it was all
really about, the reasons cited by the doctor were left open to interpretation. Interpretation, as they say, is half of the law and In the end I also needed a good reference from someone local...so I dared not ruin it!
I do agree that working as an effeminate man was more difficult than being a full time trans woman. People seemed offed by their inability to figure out exactly what to do about me...they were confused. Now a few people do know I'm trans, and I have inevitably encountered some wankers who have nothing better than to harass someone who is different...but I find those dim-wittes types tend inherently to have very visible flaws, and I make fast work of them.