Is cross dressing a mental health issue?

Depends: Depends on the reason for the x-dressing. For the most part, it is a simple bit of fetishism. If you are unable to maintain sanity without it, then i suggest seeing a therapist.

Cross Dressing: Cross dressing is not a mental health issue unless it interferes with work or important relationships. For instance, if a married man cross dresses in private but cannot share it with his wife, he must do a lot to hide the behavior and also may feel distant from his wife. However, if someone cross dresses and has a good social group, good outlets for dressing, his or her mental health can be good.