Houston's Culturcide has been described as an "industrial noise band" and that certainly fits. I have no idea if they were/are gay, but the song "Santa Claus Was My Lover" definitely is. It's also very "local," and makes mention of the 80's hustler bar "Midnight Sun," and Westheimer Street, which runs through the gay ghetto. It's a rare 45; I find several copies for sale in the $40 range, and it no doubt got very limited distribution. This is especially because that song not only uses the backing music for Michael Jackson's "Billie Jean," but, well, it was recorded OVER that recording.
Upon googling I was kind of surprised to find the band is still around and even has a current website and Wiki bio. The flip side, which is labeled the A-side, (though the other side is "Side 1") has no gay references but is awful in its own right. It's "White Christmas," done suicide style. Hear them both...(I did warn you...:)