What does Buddhism literature and tradition say about transgender folks?

This may seem like a question that is far too modern for an ancient tradition, but when I traveled in Thailand I learned that katoeys (male-to-female) are a legal gender in Thailand. What does Buddhism say about the folks who experience discomfort or distress because there is a mismatch between their biological sex and gender identity? As it becomes less dangerous for transgender folks to change, I am finding out that several of my friends are transgender and I would like to know what Buddhism offers them.