Like I said, I don't see any good way to square this circle.
But I do mean, actually consider it a disability. In US law, for example, officially-recognized disabilities are entitled to reasonable accommodation. The only way for transsexuals to get that legal protection is to get the corresponding legal recognition.
You hire a guy with a Napoleon complex, you have to make reasonable accommodations. Let him wear the uniform and refer to himself as Emperor, maybe. But you're not required to follow him into Russia next fall, and you don't have to let him use cannon to subdue unruly subcontractors.
One advantage to this approach is that the "reasonable accommodation" standard allows us to look at these issues on a case by case basis, and be more sensitive to context and nuance.
For example, in most workplaces it should be pretty trivial to agree that Joe-sephina can use the women's restroom or changing room without being challenged, if (s)he wants. A blanket, national "one size fits all" ruling on restrooms isn't necessary.
On the other hand, it does mean officially recognizing gender disphoria and similar conditions as disabilities. This, as you say, would be controversial.