Yes I suppose they were shocked but that is the point isn't it, I would have loved it :D
AE went on about him dying his hair as if he had 'murderer dyed in red across the fringe but she was old before her time, possibly because of her controlling father, poor Ann. 
I think it is strange that Colin is taken in by those "transvestite" allegations made by the family. I seriously don´t think that Jeremy went around in Goldhanger or sat on his tractor dressed as a woman (!!)
They may have drawn a paralell between his makeup and whatever eighties clothes he wore and tranvestism, but wouldn´t Colin, a big city boy who attended clubs in London not have seen through that?
Did he deliberately paint a bad picture of Jeremy here?