Yes, it happened in Austria, but still, Cardinal Christoph Schnborn is a former student of Joseph Ratzinger, a.k.a. Pope Benedict XVI, and a confidant, they say. From the Rorate Caeli blog, via Dreher:

The Archdiocese of Vienna confirmed on Friday the election of a 26-year-old homosexual council member in the Sttzenhofen municipality of the Weinviertel [region, north of Vienna]. The case had triggered a heated debate. Florian Stangl, who lives in a registered partnership, had been elected in mid-March, and, although chosen by a large majority of the population, had been rejected by the local priest because of his way of life.

Cardinal Schnborn met Stangl and his partner as part of the process before the Bishops Council made its decision to uphold the election -- in this instance, at least -- and reverse the decision by the parish pastor, Father Gerhard Swierzek, who had blocked the man's election and also asked Stangl not to receive communion. Schnborn's statement indicates that some changes to the election process may weed out such unusual circumstances in the future, but his words are interesting:

I thank the many candidates for the parish council elections. By their candidacy they showed their concern for the Church and the Faith. Thus they witness to the vitality of the Church. In their diversity they reflect the diversity of the life and faith journeys of today. Thus there are many parish councilors whose lifestyle does not in every way conform to the ideals of the Church. In view of the life-witness that each of them gives taken as a whole, and their commitment to the attempt to live a life of faith, the Church rejoices in their efforts. She does not thereby call the validity of her ideals into question.In the small community of Sttzenhofen, which I hold in great esteem, there is lively participation in Church life even in the younger generation. A sign of this is the high turnout the parish council elections. The formal errors which have come to light in that election do not call the results of the election itself (in which the youngest candidate, Florian Stangl, received the most votes) into question.I was able to have a personal conversation with Herr Stangl, and was deeply impressed by his faithful disposition, his humility, and the way in which he lives his commitment to service. I can therefore understand why the inhabitants of Sttzenhofen voted so decidedly for his participation in the parish council.

Austria is in many respects a laboratory for the future of Catholicism in the West -- traditional faith, modern sensibilities. Many Catholics leaving, many Catholics staying and fighting for changes.