An 'elephant in the room' has been used in a variety of senses for 'something obvious and incongruous' since the first recorded example in 1935. (OED)
However it is only since as recently as 1984 that it has been around in the sense for which it is nowadays most often used, namely 'for a significant problem or controversial issue which is obviously present but ignored or avoided as a subject for discussion, usually because it is more comfortable to do so'. (OED)
The full OED entry is worth reading and is as follows:
Draft additions March 2006
orig. U.S. elephant in the room (also elephant in the living room) and variants. Categories » a. The type of something obvious and incongruous, esp. (in Logic and Philos.) in discussions of statements which may or may not correspond to observable facts.
1935 H. T. Costello in H. M. Kallen & S. Hook Amer. Philos. Today &
Tomorrow 106 It is going beyond observation to assert there is not
an elephant in the room, for I cannot observe what is not. 1948 H.
C. Haydn Time is Noon 310 To drag in, no matter if it is as
incongruous as an elephant in the living room, some reference to the
class struggle. 1959 N.Y. Times 20 June 19 Financing schools has
become a problem about equal to having an elephant in the living room.
It's so big you just can't ignore it. 2003 Philos. Stud. 112 12
b. A significant problem or controversial issue which is obviously present but ignored or avoided as a subject for discussion, usually because it is more comfortable to do so.
1984 M. H. Typpo & J. M. Hastings (title) An elephant in the
living room: a leader's guide for helping children of alcoholics. 1996
Sunday Times (Nexis) 22 Dec., All the comment had missed the
elephant in the room—and thus, despite the SIB's mild reform ideas,
something like Sumitomo could happen again. 2001 M. F. Green
Schizophrenia Revealed i. 12 Accessory symptoms, such as
hallucinations and delusions, became the elephant in the middle of the
room. 2004 N.Y. Times (National ed.) 29 Aug. iii. 4/4 When it
comes to the rising price of oil, the elephant in the room is the
ever-weakening United States dollar.