Tammy,
To first answer your question; would I have dressed on active duty if crossdressing had been allowed?
Absolutely not. Now.... let's discuss it.
Considering the 3 decade era in which I served and given the social attitudes, I would never attempt it. I don't care how much my identity or heart was in it, I couldn't be that brave because it would have been certain death to do so. Career death, reputation death, trustworthy & dependable death, etc.
How I wish it weren't so but the reality is that military culture isn't the optimum culture to be transgender, have sexual orientation issues or any other personal issue.
The military/warrior culture itself is much to blame, and that's understandable. Military culture is all about tradition and history. That culture MUST breed a "kill" mentality in warriors; to be strong, aggressive and decisive; all traits that general humanity values as male traits. Even if that's a stereotype, that's the plain damn truth. That culture is very INTOLERANT of anything effeminate or un-masculine. Most of the women who are successful at military careers do so because they adopt "male" qualities in the male dominated world. The men (warriors) don't assume feminine characteristics through gender integration.
There are rare and valuable examples of transgenders who have successfully served. I'm thinking of Chief Kristin Beck. There's a few notable others. But to a girl they will admit they had their marvelous and often heroic military success AS a man, in their MAN body. Had they come out on the middle of active duty, they would have been discharged from duty.
I think nearly every TG or CD who served on active duty (and I might say this is true of most LGBT folk during the DADT years and before) knows that one of the best places for people like me to "hide out" is in the military. I didn't consciously do it. I actually joined because it sounded like a lot of fun and a rare opportunity I faced. But the armed services attract a lot of dysphoria sufferers and gay people (or it did) because the mere disciplinary consequences could be so strict. Looking back, I used my military status as a form of "therapy" to convince myself I could be just like normal men. We all wore uniforms. We were a rank and a name. The military supplies you with an identity. For a man with an undecided identity, it was a grateful gift and a great place to hide my problems...... almost.
I under-dressed during my career, often under class C dress casual uniforms. It was panties, and sometimes bras. I'd often find myself TDY or traveling alone on official business travel. I bought garments like lingerie and slips, then disposed of them before returning home to base. It wasn't prolific and the secret I carried under my uniform almost always scared the crap out of me.
I started for a time to wear panties under my flight suit, until I had an in-flight emergency and almost had to eject. It was over Indian Country, so to speak. I faced the specter of being captured by an angry hostile enemy in women's panties (and tortured for it), or being rescued but EXAMINED head to toe my my Navy Flight Surgeon. Not the kind of thing I needed to have running through my mind while my jet was falling like a refrigerator from FL280. I never did that again, besides I learned that heat transfer through a fire resistant Nomex flight suit can still cause nylons like panties to melt to human skin. Panties were off the warrior wardrobe.
I pray that the laws change. However, TRUE change will take a long, long time if ever. The military culture is very un-forgiving of weakness or failure. It just is. There's a social evolution going on now with greater acceptance of LGBT peoples; especially the CD/TG community. Younger people are learning. Others in The World are coming along. It's a very slow process to change minds and hearts. It will happen one day, but that day is NOT now.
I don't care if the Law is changed. I don't care if the courts strike down the Executive Order to rescind the Obama waiver. There's still a cadre of senior leaders who have adapted to the LGBT changes. They will look out for those who are on active duty, and I don't fore see wholesale dismissals from the ranks. The one thing that ANY LAW can't change are the hearts and minds, and the culture. Until that (slowly ? ) changes in American culture, it won't fly in the ranks which are a reflection of the country. TG's serving openly would be discriminated against, not promoted, be deemed 'unsuitable' for all sorts of bureaucratic reasons, etc. The warrior culture may NEVER be fully accepting or comfortable with men in women's garb simply because of the prevailing scent of testosterone that is everything violent and aggressive.
I fully support and applaud the Activists who are working this issue with the DoD and government. I fully understand the issue of human rights, and a TG's right to serve their country. But I also know the military and what it is; and military life is NOT suitable for every citizen, and every citizen is NOT compatible with the military. God Bless the Kristin Becks who have taken the spears for everyone else.