I’ve been tracking down the sources for this claim, and I’ve found three so far. The first is a biography by Christopher Hollis, published in 1933, entitled simply Erasmus. This is an antagonistic biography – the author is definitely a polemicist for the Roman Catholic church. It paints a truly ugly picture of Erasmus, indicting him for greed, deceitfulness, inconstancy, selfishness, and all manner of other human failings. Hollis definitely insinuates that Erasmus was gay: "...he found young men extremely attractive....he had written... some very peculiar letters to that fellow-monk Servatius...he addressed the young men in language of excessive endearment and, as a consequence, before long won for himself the reputation which those who indulge in such a habit must necessarily expect. In particular, he expended affection on that young Thomas Grey." However, in the final analysis, Hollis admits that the evidence just isn’t there: "We cannot say that Erasmus was guilty, but we can say that, if he had been guilty, he would nevertheless have denied it."
I think it fair to dismiss Hollis’ insinuations as unsubstantiated polemic. A quick recitation of some quotes from the book demonstrates just how poisonous his pen is: "Fortune and benefits he considered as his right, and only complained against their goodness at not being better." "Meanwhile fame had come to Erasmus, and with fame what had previously been conceit burgeoned forth into a yet larger arrogance." "Luther, poor man, was now quite mad and his violence incredible."
The second source is Homosexuals in History, by A.L.Rowse (1977). Rowse has excellent credentials as a historian, and he plainly and clearly declares that Erasmus was gay. Unfortunately, his discussion of the matter is breezy and informal, a good tale well told -- but there’s nothing whatever in the way of documentation or support. Rowse makes assertions that, so far as I know, have no basis whatever in the primary sources. He quotes no letters, presents no justifications, cites no other works, and offers no bibliography. Basically, all we have here is Rowse’s personal opinion, offered in a take-it-or-leave-it fashion. Those who want to believe it are welcome to do so. Those who are cursed with the scepticism of the educated will find nothing here to sway their judgement.
A third source is Gay Men and Women Who Enriched the World, by Tom Cowan. Dr. Cowan holds a doctorate in history and so must also be granted a great deal more credence than I myself can claim. And he certainly declares that Erasmus was indeed gay. Unfortunately, his work suffers from exactly the same problem that discredits Rowse’s book: there’s nothing in the way of support. He simply declares that Erasmus was gay and expects you to take his word for it.