I haven't had this happen, and I would have few misgivings about permanently cutting off such a family member or "friend." But it's too easy for me to do such things. In the past, whenever I've reached the tipping point with anyone, I've cut that person off. Now I'm trying to cut back.
But I have to say that I'm a little confused about your confusion. Maybe you're just trying to keep the peace or cut your sister a break, but IMHO, when you make it quite clear that calling you by your birth name is an insult, but she still does it willfully...well, isn't that a continuing insult? If you've told her how you feel and she keeps doing it, then it seems to me that she's either terribly slow to understand (and by that, I mean perhaps she has a recognized disability that you haven't mentioned), or she honestly wants to hurt you.
If she's just being "funny" and you've told her that it's hurtful rather than comedic, then you might want to review your relationship with her.
One solution, I suppose, is to stop giving her the reaction she so obviously craves. This is how I handled "mean girls" when I was younger. They still tried to torture me, and it still hurt, but the torture always fizzled out pretty damned quickly. I would just give them a deadpan, say nothing, and go back to whatever I was doing. Now, granted, I learned this technique because I was too scared and too shy to say anything, but it still works great. Another solution? Just ignore her completely (that is, don't interact with her at all) or have nothing to do with her for a little while, if that's an option. If you don't live with her, you might even tell her that until she starts treating you with more respect, she's out of your life. Leave the ball in her court, and tell her the consequences up front.
Some might say that you should give her a taste of her own medicine and find something that's as important to her as your boyness is to you. In U.S. society, with all of the insecurities that we internalize, this probably wouldn't be hard to do. But this type of action tends to escalate and frequently results in bad feelings on both sides. Sometimes long-term rancor. If you want a good relationship with your sister in the future, don't retaliate.
