As a disclaimer, I'm only explaining the line as it was written and intended. Some people might consider this joke to be outdated and possibly even offensive nowadays.
Sometimes we use "there's [x], and then there's [y]" to mean that two things have a similar quality but to a massively different degree. For example, "there's beautiful and then there's you" would be a way of saying someone was extremely beautiful. Other times we may use the same construction in a sarcastic way to say that two things are not alike. For example, if someone said someone was "nice" you could counter that by saying "there's nice, and then there's [name]", which would sarcastically mean that the person is not nice.
In your example, it seems to be the former - showing that something is many degrees greater than the other. There exists a stereotype (possibly offensive to some) that gay (homosexual) men are flamboyant. In your example, Chandler is talking about another man's (Zack's) physical features in an over-enthusiastic way. Monica is suggesting that Chandler's enthusiasm for Zack is so exaggerated he is appearing as if he might be attracted to him, hence 'gay'.