The report, Conduct Unbecoming, is the sixth annual report on the armed forces' "don't ask, don't tell" policy by the Servicemembers Legal Defense Network, a private organization that helps gays and lesbians in the armed forces.
In the report, SDLN claims to have documented 968 incidents of anti-gay harassment, including a murder, assaults, death threats and verbal gay bashing from February 1999 to February 2000, up 142 percent from a record 400 violations the preceding year
The report also cites a 30 percent increase in commanders breaking the "don't ask, don't tell" policy.
The Pentagon says it will not tolerate harassment, but while it has promised to look into the cases cited in today's report and take action against anyone who is guilty of harassment, Defense Department officials insist the "don't ask, don't tell" policy is working,
But in some cases, the report says,"Service members...come out because of unchecked harassment." In other words, they break the "don't ask, don't tell" policy to protect themselves.
"Service members are coerced into telling," says C. Dixon Osburn, Co-Executive Director of the Network. "They're hounded, they're harassed. They're chased out of the service."
One such servicemember was Lori Smith , who told CBS News she endured constant harassment as a young sailor aboard the carrier Eisenhower, because her shipmates believed she was gay.
Smith recalled the slurs: "Anything from 'lesbian' to 'dyke,''Gays shouldn't be in the military,' 'You're not supposed to be here,' 'We don't want you here.'"
She said she complained through Navy channels but nothing happened.
"I tried to go to the chaplain," said Smith. "I tried to go to the lieutenant and tell them that this stuff is going on and all they said was, if there's nothing really physical that's happening to you, there's nothing they can do."
Fearing for her safety, Smith admitted she was gay and was kicked out of the service.
The most infamous case of gay-bashing in the military was the July, 1999 beating death of Army Private Barry Winchell, a gay soldier at Fort Campbell, Kentucky.
Private Calvin Glover, 18, was convicted in December, 1999, of murdering Winchell and is serving a sentence of life in prison with a possibility of parole in ten years.
An accomplice, Specialist Justin Fisher, 26, was sentenced to 14 years in prison.
But Winchell's mother, Pat Kutteles, who is now suing the Army, says none of the commanders who allowed the anti-gay clmate to exist have been disciplined.
"There has been nobody that has been held accountable for the army's part in the harassment," said Kutteles.
Recent photos of graffiti at Fort Campbell still show a climate of hatred, like a drawing of the bat that killed Winchell labeled a "fag whacker."
"I've heard from servicemen that are afraid, that are afraid to talk, that are afraid to stay in the military," Kutteles said. "They've been threatened by 'shall we get a bat, do you want to end up like Winchell?'"
In August, the Pentagon announced that all service members will undergo training to clarify the "don't ask, don't tell" policy on homosexuals in the military, which was launched in 1994.