Flash Fiction Online Update: Freivald Clarifies. Still Queer-Unfriendly.
The original linkdump on this situation (with background) is here.
Long story short, Jake Freivald at Flash Fiction Online turned down an ad for the LGBTQ issue of Crossed Genres because it was "sexually themed". It turns out this was his way of saying it was an ad for an issue that would likely portray LGBTQ relationships in a positive light, which he did not approve of. At one point during the discussions he justified his stance against "normalizing" gay relationships by comparing them to pedophilia.
So you can tell it was generally an awesome conversation.
Freivald discusses his stance a little further with Rachel Swirsky here.
Although it’s painful to say, and more painful for others to hear, I don’t support the normalization of GLBT relationships in our culture. Marriage is only one aspect of that (albeit the one I tend to focus on these days). The Crossed Genres ad still felt like a gray area because you never know what’s going to show up in a spec fic magazine - and I could feel myself looking for rationalizations to avoid the coming s**tstorm - but ultimately I assumed the Crossed Genres issue would be supportive of GLBT relationships in our culture, and I rejected it.
He also notes:
All things being equal, I wouldn’t avoid a magazine just because it didn’t accept Christian advertising. Failing to support something isn’t the same thing as attacking it.
Of course, this latter comment was on advertising, and not story content.
I'll also note that the guidelines for Flash Fiction Online are still opaque on this point.