Shelley's reason for starting the thread was to explore firstly whether or not to tell the ex; secondly how to go about telling her. She is absolutely right to take all the time she needs to make sure she is clear- this isn't a genie which can be put back in the bottle.
Shelley- as far as your ex's possible reactions go, I suspect you're focusing on worst case scenario- and that isn't the most productive way to deal with your situation. Try to focus on your own needs, not hers. She lost the right to have you put her needs on an equal footing to yours when she signed the decree absolute. If you can keep your own needs and goals separate from what you imagine hers to be, your path forward will become a lot clearer.
You're obviously a caring person, but at this stage you have earned the right - because you and she decided to divorce - to live your own life, free of her judgement, opinion, or criticism. What she thinks, either about men who crossdress or about the fact that her ex likes to crossdress, is no longer relevant- you're still allowing her to influence you. The only reason you're contemplating telling her, and worrying about her reaction, is because you've allowed her to move back in - an act of great kindness - and you are therefore still in that sense 'a couple'.
It might be hard not to feel to some extent that what she thinks of you has validity, but the reality is that it is no longer any of her business, and I'd like to see you stop giving her possible opinions that validity.
It's girl power, yo. Just tell her what you want, what you really really want.