It's talking about something that's flat impossible. There is no such gate. Camel and camel hair are not the same word.
The "easier for a camel to go through the eye of a needle" is matched by similar expessions in other ancient texts. The words mean what they seem to mean. There are no hidden or clever interpretations needed.
http://www.biblicalhebrew.com/nt/camelneedle.htm
seems to be a good summary.
Quote:
Originally Posted by NatCh
I hadn't heard that before, it is, indeed of interest.
The other, lesser known interpretation of the passage holds that one of the gates of Jerusalem was called "the eye of the needle" -- it was evidently a very small and windy one. Taking a camel through it would require the beast to more or less crawl through, so it was very, very hard, but doable.
Whichever is the root, it's clear that it's talking about something that is either very, very hard or flat impossible, so any of the three roots work well enough for the purposes of the statement. 
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