Hey, guess what? The Army isn't just intolerant of gays and transgendered Americans. It appears to object to anyone who has any sexual abnormality, no matter how large or small or completely unrelated to job performance. Here are examples of people who do not meet the official standards in the Army's Standards of Medical Fitness (available here):
Women who experience unusually heavy menstrual bleeding, or bleeding at irregular intervals, or no periods at all.
Women born without a uterus.
In men, "Current absence of one or both testicles, either congenital (752.89) or undescended (752.51) is disqualifying."
And, for both men and women: "History of major abnormalities or defects of the genitalia such as change of sex (P64.5), hermaphroditism, pseudohermaphroditism, or pure gonadal dysgenesis (752.7) or dysfunctional residuals from surgical correction of these conditions is disqualifying."
As Obsidian Wings puts it, "Unless I am very, very wrong about what exactly service in the military involves, I can't see that an undescended testicle would affect a soldier's ability to perform his duties."