Here are the comments of some random resources I examined:
1. This prohibition and judgement are speaking about a "cultic taboo"
which, if practiced, could lead to the impurity of the religion of Yahweh.
This is not so much a social, but a religious commentary and proscription.
The behavior spoken to is with reference to the background of the competing
Canannite religion which included the worship of Astarte (Greek name) or
Ashtoreth (tha Canaanite name).
[Gerhard Von Rad, Deuteronomy, Westminster Press, 1966, p. 141)
2. Astatre (Ashtoreth) was the Canaanite fertility-goddess. In
Mesopotamia she was called Ishtar, but should not be confused with
Ashera,the Mother goddess. Astarte, known as the "giver of life" was in
direct competition with the Israelite God, Yahweh, whom the Hebrews came to
know as the Lord of Life, the God of all creation. This competing religion
from which the Israelite religion was trying to keep its members, practiced
cross dressing in the context of the worship of what Israel came to view as
a false god.
[Interpreter's Dictionary of the Bible, Vol 1. "Ashtoreth", and some of my own thoughts]
3. (Deut 22:5) is an "Anti-Canannite legislation" which conveys a fear of
concern for the contamination of Israel's faith.
[Cambridge bible commentary, Anthony Phillips, 1973, Cambridge University Press, p. 145]
4. "While this law in its original setting has no direct application for
modern life, there are some indirect implications...There are positive
values in preserving the difference between the sexes in matters of dress."
The author includes this footnote: (H.A. Hoffner, 1969, proposes that the
interchange of clothes was a magical practice to cure infertility. The
biblical cure was not magic, but prayer and God's power."
[Deuterononomy, J.A. Thompson, Inter Varsity Press, 1974, p. 234]
5. "The impersonation of the opposite sex is usually for vulgar and lewd
enterntainment. In heathenism such exchange of garments was generally for
immoral purposes." The text also says this: "A law appearing only here
and usually interpreted as directed against the simulated change of sex in
Canaanite religion. Evidence of the latter is derived, however, rorm
sources which are much latter than Israelite times. It may be that the
motivation comes from the Israelite abhorence of all that is un-natural;
though in point of fact we have no certainty as to what lay behind it."
[Interpreter's Bible, Vol 2, Abingdon Press, 1953, pp. 465, 465.]
My summary: Limited though this review may be, there are some interesting admissions and insights here:
First, the context and direct application of this injunction are not at all clearly nor readily available to us in the modern setting (from the text itself, nor from the context out of which the injunction comes).
Second, it does appear reasonable to conlude that, given the early stages of the development of the religion of Israel in the times from which this text is taken, there would have been a profound effort to distinguish it (the worship of Yahweh) from all other relgious cults (I use the term to refer to any organized system of relious belief, not to malign all others outside of Judaism or Christianity as somehow evil, though many were judged to be so by the scriptures themselves. There's nothing new there. And the truth is, that many competing religions regarded the fledgling Judaism with a similar attitude).
Third, both in its historical context (the development of a new religion in a world of previously existing faith systems) and in its cultic context (describing the faith - what is and is not pleasing to God) the Book of Deuteronomy is a piece of religious legislation which helps its adherents define both who they are, who God is and who others, not part of the children of God, are.
Fourth, this text does presuppose an understanding of sexual difference, but it does not speak to anything more than a concern that Israelite worshippers not imitate the masquarade or role reversal (in appearance) that was practiced by those of other religions who were activcey engaged in the cultus that was proscribed by their own tradition.
Fifth, as testified by the opening comment from source number 5., there are many who have read this and other passages of the scripture, from the vantage point of their own bias, and then, passed that bias off as a trustworthy insight into the teaching of the text. Consider how Paul's admonition that slaves submit to their masters was used to justify the slave trade in Europe and America for three hundred years. None of us is exempt from the tendency to read what we want to read in or out of a text, no matter how conscious we are of our biases. Why? Because we are always exsiting in a given historical, cultural context, our own "here and now" which will always skew our perception of what was said, what it meant then, and what it means now. Those who insist or a categorical pronouncement of "what God says" are assuming a great deal. Jesus did so much for the world and for Judiasim in particular by opening our hearts, minds and spirits to the Spirit of God in such sayings as "love the Lord you God with all your soul all your miond andall your stenght...love your neighbor as yourself - on these two commandments hang all the law and the prophets. (Not noted in any circles I travel in as a biblical theolgian, Tom Jones, nevertheless, hit the nail on the head when he sang "without love, I am nothing, nothing at all"!)
My intent has not been to conclude that Deut 22:5 has nothing to say to people of faith who are transvestites or who live with or love those who are. I simply intended to take a closer look at the text itself in the context of its place in scripture and in history. As always, I believe, there is yet more light which may be shed upon the word. At the very least, howvere, I do believe it is fair to say that this passage is not and can in no way be construed to be a wholesale condemnation of people of faith who crossdress. I hope this piece stirs some to think and study the matter further.
I welcome any comment, feedback or discussion.