Here is a new theory on the true cause of why some men cross-dress. Basically, the field of psychology has not provided an accurate or helpful explanation for the cross-dressing community. This is because the model should not be based on psychology, but neurology.
For the most part cross-dressers are seen as normal, healthy, heterosexual men who gainfully function in society as doctors, pastors, and engineers, just as well as the general population. Their cross-dressing is not a result of childhood trauma as they do not exhibit any signs of being mentally disturbed, nor are they schizophrenic. The sensations they claim they feel from cross-dressing are not a result of a delusion or vivid imagination, rather they are a result of neurotransmitters, such as dopamine, which are activated in their cross-dressing experience.
This biological model says that cross-dressers have their brain hard-wired to interpret cross-dressing as actual contact with a female. When they feminize themselves their brain goes into action and releases a host of neurotransmitters, dopamine, serotonin, oxytocin, etc. which produce the sensations of well-being, comfort, pleasure, sexual gratification and bonding. It affects the reward centers of the brain, instant gratification, and thus it mimics the addiction response. It cannot be "cured" because you cannot stop your brain from releasing neurotransmitters.
So exactly how this is small percentage of the male population (approximately 3%) get their brains wired this way??? The answer goes back to synaptogenesis and neural pruning. There are certain critical periods in brain development when your brain creates a myriad of neural connections. In fact, you have the most synaptic connections when you are 12 months old. Then through the learning process, these connections are either reinforced or pruned. There is another critical period of synaptogenesis and pruning during adolescence. (This correlated well with cross-dressers who say that their cross-dressing begin in early childhood (~75%), or during puberty (~25%), Occasionally this process maintains some unusual neural connection between sensory pathways. For instance a person may see colors associated with numbers. Or, a person may experience taste sensations associated with hearing certain words. When a person has a neurological condition where stimulation of one sensory pathway leads to automatic, involuntary experiences in a second sensory pathway it is called synesthesia.
So, compulsive cross-dressers may be seen as having a form of synesthesia. When 97% of the male population can wear a skirt they feel nothing but humiliation. However, 3% of them will experience actual contact with a female. Their brain will release neurotransmitters and they will experience all the sensations. These are real, not imagined. It is automatic, involuntary, and profoundly affects the person.
Psychology only comes in play when the person tries to cope with his form of synesthesia. He tries to make sense of his experience and may wonder if he feels contact with a female because he is a female. Or, it may be entirely sexual. He may adopt a female alter ego. Or, he may satisfy himself with one or two articles of clothing and not accept himself as female, at all. The entire spectrum of cross-dressing is explained by our personal interpretation of the synesthesia sensations. Because the neurotransmitters are real, and a part of our biology, it means that all the spectrum of cross-dressing is valid. The only persons living outside of reality are those who have this form of synesthesia and then deny this part of their person.