this rumor the LA Times is supposedly sitting on is one I never heard in this specific form before.
To me, that means that there has been some sort of speculation about this purported sexual issue in the past. Obama hasn't been the subject of scrutiny long enough for that to be true - most of the 'scandal' speculation about him has been related to the question of whether he was a Muslim at some point in his life. On the other hand, there have been rumors - especially on the right - about Hillary's lesbianism since the early 1990s. (Also about her alleged affair with Vince Foster, and that Web Hubbell is Chelsea's father, but I digress....)
To me, that strongly suggests this is about Hillary, and that it's a lesbian relationship.
And when my source said “everyone in Washington”, knows about it he means everyone in the elite Mainstream media, not just the LA Times, but everyone regularly writing about the Presdidential campaign knows about it and doesn’t know what to do with it. And I must admit it really is was juicy if true. But I don’t know if it’s true and I can’t decide if I think it’s relevant. But the fact that “everyone” in the elite media knew about it and was keeping silent about it, is, itself, news.
If it were a Pubbie in a sex scandal, it would most certainly be deemed "relevant", as we are the party of the "values voters".
Hillary in a verifiable lesbian situation WOULD be news. And they would be agonizing over the reportage of it--is it really relevant if it happened in the past? Is it really relevant just because it is homosexuality? How many people have the Clintons really had rubbed out anyway? Those could be some of the questions of which they are wrestling.
In any case, it will not remain "secret" for much longer. I'm guessing that someone will leak it to the blogosphere.