Hey, here's my take on it:
1. In males: (Benign) A leydig cell tumor will cause an over-production of testerone, which as you know only a small percentages leaves straight though the blood to the gonads, while the majority of that previously made testerone goes to the sertoli cells to aid in spermatogenesis. Since the sertoli cells are ONLY sensitive to Leydig cell-testerone, an increase in leydig cell activity will cause an increase in Sertoli cell activity. Now we have an over-working sertoli cell which also has aromatase which will end up converting testerone to estradiol; therefore cause the feminization and virility. Note that the increase of testerone would also cause the secretion of inhibin that would inhibit FSH, but in the overall picture, there would still be an increase in estradiol since aromatase is also found in peripheral tissue, so there will be estradiol formation elsewhere.
2. In females: (malignant) Ovarian Leydig cell tumors are pretty much a testicular structure found in females. Leydig cell in males is as to theca cells in females, but they're not the same structure. Therefore, if you think about the effects of having a MALE-based cell that produces androgens in a female, it only makes sense that the excessive androgen (testerone) production would cause masculinization.
I hope this helped
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