The Lake is a surprisingly well-polished tale from Josh Randell that is also refreshingly positive and romantic. It is the first of his transsexual romances, in which masculine, chivalrous men fall in love with beautiful, proudly feminine, transsexual women.
When Danielle nearly misses Hunter with an errant Frisbee throw, the two enjoy a little casual flirting with an open promise to meet up later. Much to his delight, he emerges from his swim in the lake to find her waiting on his blanket, and a little more friendly flirting leads them back to his tent. It's all fun and tastefully done, coming across as a genuine encounter between two strangers with an instant attraction to one another.
The eventual coming out scene here is as casual and tastefully done as the flirting before it. Danielle is smiling, with a blush on her face, when she reveals her little penis, and Hunter is entirely okay with it. He doesn't make a big deal out of it, and neither does the story. Hunter gives it a casual lick and a fondle, and while the story never makes it the focus of their lovemaking, it does touch upon it as a source and symbol of arousal - much like an erect nipple or bitten lip.
At its heart, The Lake is a romance between a man and a woman, with the attitudes, words, and actions all in accordance. The fact that Danielle is transsexual isn't at all irrelevant, it's just not the focus. It is an important part of her, and something that plays a role in their relationship, it just doesn't define her.