WOW, does this sound familiar to me. It's going to take time for everyone. Your brother is very sensitive to everything that he hears. Every joke is really a stab, every word that sounds like an insult is unacceptance.
Your mother and everyone else are unsure which way to go, how should I react, should I joke about it, and the as my mother always said to me, I just don't want you to suffer because of societies narrow mindedness. It will work out. After many, I mean, many arguments with my mother, we are now really close and they all except and love George as part of the family. (Wish I could say the same about his mother, LOL)
If they need to talk, do it at a nice restaraunt, that way no one is going to be too loud.