There's a polite way to use homo? Give me a break.
Homo is offensive too. Combining it with another word doesn't make it an "in this case" situation.
Plus, it isn't just the word that is the problem in this case, as you say. It is indeed the context. Basically, it would be like me saying that I think you're a cool dude, Leo, but hey, that doesn't mean I'm gay - being gay is icky.