Stop being so grumpy, grumpyman.
What, am I supposed to hope the rumor goes away magically? I would much rather have a rumor going around that I punched a kid in the face for breaking my glasses over getting balls in my throat.
Eh, rumors pass. They always do.
Aside from ones like this, this one will follow you to the ends of the earth.
edit: bah, I'm sorry, I can relate, I got made fun of back in the day pretty hard. Not so much for gayness, just because I was ghetto.
Your problem is really simple. You care too much about what people think of you, and naturally people in your school, and everywhere, will take advantage of that to make themselves look better. This is the way of the world.
And saying "I don't care about it" does completely the opposite and makes people believe that you care even more and are just denying it.
So what would I do? Well... Personally I'm comfortable with myself, and frankly I don't give a good god damn **** about what people think of me or what my sexual preference. I would turn it into something funny that people can enjoy.
"HEY GAY MAN, I HEARD THAT YOU GOT TEA-BAGGED!"
"Oh yeah, it was delicious, mint flavored actually. It's much better than actually heating up water and putting tea in it...."
"...Then I sucked on a man's testicles, what a day!"