I don't have any helpful suggestions, but I sympathize with you. I think the DL-329 form is really messed up and I'm still furious at my NC doctor (the trans-friendly doctor!) who wouldn't mark the "completed" box on my form because I hadn't had a hysterectomy. She said the form was for my protection/best interests but I couldn't get her to explain that in a way that made sense to me.
So yeah, I went along with it; I don't have a passport at this point and I would rather deal with the ridiculous form than have a license with an F on it at this point. But I totally understand your unwillingness to fill it out.