It seems that the Crown Prince's playboy style and the accompanying rumours confused many people. I too always assumed he was gay, but can't seem to find any direct mention of this by any biographical sources.
Correct, no mention about this in his biographies that I've seen either, but he was a 'player', as they say. Ann may be correct as well that this mystery woman may have confused "prince" with "crown prince", after all it was very much post-royalty, and if the lady led the life suggested by Bongo, who knows what she may have gotten confused?
That said, some of the photos posted of CP Wilhelm on threads here make him look as gay as pink ink. But, we can't judge a book by its cover.
Also, I'm surprised that the term of endearment "tranny" was used by the lady in that it was not quite yet crafted for slang use in Weimar Germany, was it? The old slangs for transvestites were TVs, dolls, ladyboys, and mollies.