Early on, drag was one of the few outlets for what we now call transgender women. "Morals laws" prevented living as one's authentic self, subjecting us to arrest should someone notice that we were wearing clothing inappropriate for our gender assigned at birth. Law enforcement was particularly harsh on those of us who favored a feminine appearance.
There were some places where we could be seen on the street and not be immediately busted. In San Francisco, we were 'permitted' north of Market and west of Polk, east of Stockton, the neighborhood called "The Tenderloin". Police wouldn't hassle us so often there. In 1967-68 we could also be in the Haight-Ashbury neighborhood, but that became unsafe in 1969-70, with police 'cleanup' sweeps.
At 14 I discovered that if I gave the bus driver an extra dime, I could ride all the way into San Francisco. In 1967, that was quite the experience. I wore my boots and flare pants, and in the SF bus terminal I'd change my top to something a bit more Bohemian and brush out my hair, another 14 year old hippie chick running around the city. Then I'd head off to visit new friends over at Taylor and Turk St, or out near the Panhandle at Haight & Ashbury.
I was busted on a 'morals charge' in 1969, for a top that buttoned the 'wrong way', after being picked up in a sweep to get those damn hippie kids off the street. The parents were informed, and hilarity ensued.
Most of the older trans women in the Tenderloin seemed to be either drag performers or sex workers. One auntie there took me under her wing and gave me some pretty strong life-altering advice, to avoid the drugs and the sex work, and try as hard as I could to make my way in life on my own terms. Her language was more colorful than that...
Drag has evolved over the years. As trans women became more acceptable in daily life, fewer have done performance work as an outlet for themselves, I suspect. Some of us were able to make it in life without the relative risks of sex work, although that remains relatively common in our population. (Sex work is work; hard, a bit risky, but something that has been honorable through much of history. Debating this is a topic for another thread, though.)
As performance, drag is a theatrical play on sexuality and gender, and relies on hyper-sexual interpretations. For better or worse, the public has confused drag gender performance and daily gender presentation, and for trans women has splashed some of that drag hyper-sexuality onto our image in the public mind. That causes us some additional problems.
I think many of us have had THAT experience, disclosing to some person only to have their responses to us shift from friendship or dating interest over to an aggressively sexual response and desired interaction. That is the unfortunate result of the femme drag hyper-sexuality coloring the image of transgender women. This isn't the fault of drag, or drag performers, but an indication of the lack of education on sex and sexuality with the public.
Our particular culture is relatively repressive and denies the need for education on sexuality, and I feel that it is the deliberate ignorance imposed on the population that leads to many of our problems. The confusion with drag, and the hyper-sexuality issues in particular come from that ignorance.
I'll just get off my soapbox now...