Parents can rest easy. Sponge Bob is not gay! He's only a demon.

sponge.bob,
originally uploaded by slit.

This is kind of an old story from the Boston Herald Police Log of January 19th:

Beware of the little green men, and yellow demons. A 51-year-old man walked into District 7 around 2 p.m. Monday telling cops that there was something wrong in his apartment, namely a ``one-inch yellow demon hiding in the heating grate'' of his Border Street bathroom.
To make matters worse, the demon looked like ``SpongeBob SquarePants'' and when the man tried to ``melt him on the heater,'' the monster laughed, then responded, ``Eat me!''
The whole time, the demon was humming the theme song to ``Jaws'', the terrified and disheveled man told police.
Cops tried to cajole him into an ambulance to be evaluated by doctors, but the man refused to go unless police ``exorcised the demon from his home.''
Police convinced him that they had blessed all of Border Street, then transported him to Massachusetts General Hospital for evaluation.