It seems to be a problem for “liberals” in this era to stand up for their beliefs in the face of commerce (thank you Michael Moore), and I'm just assuming that Ms. Starr is a liberal based on my understanding of her artwork.
The real concern here is that rather than letting the issue “flame up” and do what socially challenging art is meant to do — in this case raise debate and ask why the word “gay” continues to remain dirty and defamatory in the 21st century — the artist seems to have quickly bowed to the pressure of organizations like the Australian Families Association, organizations that continue to spew ignorance, discrimination, and intolerance at the expense of basic civil and human rights, and gay youth. Gay youth commit suicide at a rate much higher than their heterosexual counterparts partly because instances like this one appear to demonstrate that it is far safer for them to stay in the closet.
Whether or not Thorpe is or isn't gay and whether or not the artist's actions were defamatory is a different matter entirely from the actions that were taken by covering up the artwork after it was already on display. Thorpe should be commended for taking it in stride. Natalie Starr should not only be ashamed for being such a conciliatory sell-out, but for facilitating intolerance in professional sports and the world at large.