This is a hugely complicated issue, which is why mainstream services like LJ have such major must ward off litigation freak-outs.
I think for me the chan line is drawn at abuse-of-trust issues - Character A takes sexual advantage of Character B, who is too young or innocent to make an informed choice. I read a fic recently where, in the middle of the fic, the student made the move and the teacher failed to resist, and I was deeply annoyed by that. It turned out to be a dream, and the fic was resolved to my satisfaction. (Here, SGA AU, McShep, if you're curious)
But the dream sequence was graphic, and I'm not sure where it would fall in a chan/ not-chan warning system. Maybe there needs to be an implication-of-chan warning as the middle ground. If it was officially defined as covering the grey areas, it gives the avoidant reader the chance to avoid, and the mildly adventurous reader the chance to explore.