First off, I do realize that Jack London was a real person and Dr. Watson is fictional. Therefore it follows that Dr. Watson's words are actually Arthur Conan Doyles'. But they are funneled through the voice and character of Dr. Watson, so I am justified in referring to him in this post.
Growing up, as I did, in the San Francisco Bay Area, I was expected to have a working knowledge of Jack London and his works due to his association with that region. To back up my premise that there are gay undertones to his work, in particular "The Sea Wolf", let us consider two factors. He died of a drug overdose; major DRAMA QUEEN! Also, he spent quite a bit of time in Alaska during the gold rush era. During that time he was living predominately with men. While it's true that there were some female "camp followers", from the photos I've seen they looked like men which just seems to validate my point. You cannot convince me that there were no same sex shenanigans going on. It's cold up there for one thing so the shared body warmth alone you would assume would be welcomed.
For anyone who has ever read Jack London's "The Sea Wolf", they will notice how many times he mentions the captain's apparently mega buffed body. In one section in particular the character relating the story rhapsodises on the magnificence of the captain's form after seeing him naked. He even goes so far as to compare the captain's physique to other naked men's bodies he has seen. He just seems to be a bit too interested if you ask me.
On to Dr. Watson. On occasion after occasion he mentions the physical attributes of the men that consult and come into contact with Sherlock. He goes to great lengths to describe their hulking, powerful bodies. Bear in mind that Edwardian clothes were quite modest so he had to use his imagination to a large extent. Gay fantasies anyone? Plus there is his constant gawking infatuation with Holmes himself. He sometimes resembles a starry eyed, love struck teenage girl when talking about the detective. I know that at one point he was married, but that is true of any number of gay men. Plus, they never had any children....if you get my drift.
Upon reflection, it is fortunate for me that since Mr. London is dead and Dr. Watson is fictional I cannot be sued for libel or slander for the contents of this post.