Poor lamb, having to read at such an elementary level. That is torture for any child. I'm not familiar with DRA so pardon the silly question, but is this take home reading only? Or is he expected to read at this level in class?

Do you volunteer in his class, have you seen the test administered? Are you comfortable asking for an opportunity to see this test first hand? If you're okay with this then ask. I know I'd want to see it myself before I'd agree to have him go backwards. But I've become That Parent, YMMV.