I incline towards c, while respecting the views of people who don't agree with me.
What I will not accept is the attempt by various people - notably Gina Morvay, who comments on Bilerico as ginasf - to muddy the historical record by accusing Kate Bornstein of either misrepresenting the truth, or being over-invested in untruths told her by the late Doris Fish.
What Kate has said is that she understands that in sections of the Sydney and Melbourne communities in the late 70s, some people used the word positively about themselves.
This is in fact the case. I never met or knew Doris, but I corresponded with some of the women in the Playgirls troupe and met them when they came to London. Various people I know, now dead, were part of that community when in Australia. They all used 'tranny' about themselves and their friends.
According to my friends, they did so as part of an egalitarian world-view in which they wanted there to be no distinction between people who, at a given moment, identified as drag queens, transvestites, cross-dressing performers or pre- and post-op transexuals. No one got to pull rank - most people in that community turned the occasional trick, or performed on stage, not because that was who they were particularly but so that they could not pull rank over those more invested in hustling or shows.
And a lot of that community died in the epidemic, or are dead from other causes, and it is all in the past and not remembered even in those cities all that much. Maybe this particular worldview was less widespread in the community than it seemed to me at the time as I listened to those voices - I am sure plenty of people will want to correct me.
But what I will say is that the little I know bears out what Doris told Kate. Historical records are made out of a lot of voices, and they are all a part of the truth.
Gina has accused Kate of making 'underresearched' statements - a claim which contains some elitist assumptions. When a community is dead, and was not the sort of community that left all that much in the way of written records, how precisely do we research them except through anecdotal memory?
None of which, in the end, affects the fact that a clear majority of the community is either hugely or moderately offended by the term and wants it gone and out of use and rationed in fiction even in the name of realism.
But different views have existed and we should not make this the crucial indicator of transphobia in the great world. After all, Janice Raymond, Robin Morgan, Germaine Greer and Julie Bindel manage to be the gold standard of transphobia without, as far as I know, ever using the word.