This episode confirms it for me, Phil Letardo is gay. He claimed Vito disgraced his family, and now he refers to Vito's wife as a mere distant cousin, so it wasn't about honor. As shakesphere said "I think thee protest too much" Phill killed Vito out of his own self hate.
Other things that make me think this are; Phill literally walked out of the closet at the motel Vito was hiding out at in the scene where Vito is whacked. Also when Tony is talking to Dr Melfi about Vito and Homosexual activity in prison Tony says you get a pass for that. When you put that together with the frequent references to Phill having served 20 years inside. Not too mention the scene where Phill and his wife are consoleing Vito's wife and a bodybuilding competition comes on the tv and Phill yells shut that off. Perhaps I am reading into this too much, but it was the scene where Phill walked out of the motel closet that got me putting the rest together.
lol.. phil is not gay.. gays are not accepted by these guys. Phil coming out of the closet was a reference towards Vito being a homo, which I thought was funny as hell. "Laying down" is not supposed to be taken literally, he meant he isn't going to just let people walk all over him. Anywho, I'm with the guy who said he'll jump off a bridge if another guy gets comes out.
I'd say Pork Store is on the right track. Like, I'm sure, many (most?) who have served extended sentences in prison, it's very likely that Phil participated in homosexual acts. There's no doubt that Phil is over-the-top in his homophobia, and it seems fairly likely to me that most of that stems from the shame and self-loathing he feels about said acts. So while he's not necessarily gay, he clearly has issues with the topic which would seem to stem from his time in prison.