That's fair enough. If everyone is super casual, going full on formal is not likely to go over well.
But, the spirit of this forum is dressing well, and dressing classically. In that spirit, I think you could do much better. If everyone is casual, just simple trousers (light grey, tropical wool), a light shirt (light blue, button down collar), and perhaps a blue blazer, with some nice shoes would be a classic, tasteful, and respectful look, while still not being too overdone.
The issue with a black dress shirt in this instance is that it has very specific connotations, none of which are appropriate for a funeral.
Edited by aravenel - 2/2/13 at 6:25am