Why does Lama Atisha say those "observing pure conduct" shouldn't take (some) Tantric initiations? In Lama Atisha's, A Lamp for the Path to Enlightenment he ends the teaching this way:


  
  Because the Great Tantra of the Primordial Buddha
  Forbids it emphatically,
  Those observing pure conduct should not
  Take the secret and wisdom initiations.
  If those observing the austere practice of pure conduct
  Were to hold these initiations,
  Their vow of austerity would be impaired
  Through doing that which is proscribed.
  This creates transgressions that are a defeat
  For those observing discipline.
  Since they are certain to fall to a bad rebirth,
  They will never gain accomplishments.
  There is no fault if one who has received
  The preceptor initiation and has knowledge
  Of suchness listens to or explains the tantras
  And performs burnt offering rituals,
  Or makes offering of gifts and so forth.
  


I interpret this to mean that people holding vows of conduct that are in contradiction to what is required in some Tantra (so-called taboo practices of sex, alcohol or other illicit activities) should emphatically not take those Tantric initiations. 

In Louisville, Kentucky in 2013 I heard His Holiness the Dalai Lama explain that monks should not be engaging in sexual tantric practices and that to do so is a defeat that will lead to bad rebirth. Was I misunderstanding something or is it not the case that Tantric practices that involve activities in contradiction to pure conduct should be avoided by those who hold vows of pure conduct?

Do any schools of Tibetan Buddhism disagree with Lama Atisha's seeming prohibition? How about any schools of Vajrayana outside of Tibet?
Verse 64 mentions the secret and wisdom initiations.

These two initiations are taken only in the context of highest yoga tantra. Therefore, the three lower tantras are not concerned here.

From the point of view of highest yoga tantra, there are two ways of achieving enlightenment: 


With an actual consort
In the bardo, after death


It is said that lama Je Tsonkhapa could have achieved enlightenment with an actual consort, but he would have to disrobe (or to ensue a defeat). Instead, he chose to achieve enlightenment in the intermediate state.

So, there are these two ways of actualizing the completion stage and upholding the secret and wisdom initiations. One them would be a defeat.

Other practices, such as the consumption of infinitesimally small dosage of alcohol, is not considered as a transgression of the pratimoksha. During Lama Chöpa Tsok, for instance, we dip our finger into alcohol and lick it. There is no practice where you consume more alcohol than that. In addition, we say that if you refuse to do it while you actually took a highest yoga tantra initiation, it is breaking your tantric commitments.