A dorogative term used with the intention of showing displeasure at the one to whom you are uttering this phrase. This usually refers to the size of their perceived homsexuality rather than the size of the homosexual themself. More often than not, however, homosexuality doesn't actually have anything to do with the discussion. In the same way someone calls another a dick head because they don't like them, rather than the victim of these insults actually having a penis on the upper part of their face, "massive gay" is used with the intention of hurting another's feelings.
-I can't come out tonight. I've got too much homework.
-You massive gay!