Things Invisible to See: Gay and Lesbian Tales of Magic Realism is collection of eleven magical stories from various authors. This is a mixed bag of gay themed tales, but overall highly recommended. There are a handful of lesbian stories - such as the ones by Laura Antoniou and Nancy Springer.
The 'magical realism' is mainly indistinguishable from the expected range of storytelling that falls under 'fantasy', with the eleven stories introduced as being about "looking for--or inadvertently finding--something more, exploring the many layers of life as we know it and the hidden realms of the spirit that underlie our own mundane experience."
- Best Other Work, Gaylactic Spectrum Awards 1999