  We show that homodyne measurements can be used to demonstrate violations of
Bell's inequality with Gaussian states, when the local rotations used for these
types of tests are implemented using nonlinear unitary operations. We reveal
that the local structure of the Gaussian state under scrutiny is crucial in the
performance of the test. The effects of finite detection efficiency is
thoroughly studied and shown to only mildly affect the revelation of Bell
violations. We speculate that our approach may be extended to other
applications such as entanglement distillation where local operations are
necessary elements besides quantum entanglement.
