"That's terrible," Milo grieved, and his large brown eyes filled with tears. "That poor kid. It really is terrible." He bit his trembling lip hard, and his voice rose with emotion when he continued. "And it will get even worse if the mess halls don't agree to buy my cotton."A lot of things in the book are inverted like this or don't make sense in some other way, and I think fustian indicates that here. Both of its meanings are applicable: it could apply to the funeral in the sense of "high-flown or affected writing or speech," and it could apply to Milo's predicament with his Egyptian cotton in the sense of "a strong cotton and linen fabric." So the sentence could be re-written as "Yossarian was unmoved by the crushing bereavement of the burial ceremony, and by Milo's fustian charade" and still make sense. In fact, it might make more sense that way.
While it's not related to fustian, I found something else interesting while reading Catch-22. In chapter thirty-nine (subtitled "The Eternal City," one of the few subtitles that isn't a person), there's this sentence: "Buildings and featureless shapes flowed by him [Yossarian] noiselessly as though borne past immutably on the surface of some rank and timeless tide." I couldn't help but notice the similarities between this sentence and the last sentence of Fitzgerald's The Great Gatsby: "So we beat on, boats against the current, borne back ceaselessly into the past." Although the movements they describe seem to be opposite, there are structural similarities between Heller's "borne past immutably" and Fitzgerald's "borne back ceaselessly," and both sentences mention time and contain nautical imagery. Both seem to describe a sort of desolation and helplessness too.