Our DS7 is in 1st grade and had a WPPSI done in July 2010, so around the same time as you. His processing speed was substantially lower (50th-ish percentile) than his other scores (98th/99th percentiles). DS7 does not have Aspergers, so we don't have that in play.
His processing speed has affected his reading abilities, primarily his fluency, which it sounds like your DS is having problems with as well. If our DS slows down his reading, he can sound words out at a 6th grade level, but when trying to read fluently, he makes all kinds of mistakes. He has to focus so hard on the actual reading that he has a difficult time with comprehension, which affects the retells. So, we're seeing the same symptoms of lower processing speed that you describe for you DS. All of these things have improved with tutoring over the last two months. (I'll also note that his improvement is erratic, with great gains, and then a plateau or bit of regression, and eventually some quick gains again.)
We had a dyslexia evaluation done Dec 2011, which found he's not dyslexic, but his fluency is affected by his processing speed. The tester recommended tutoring to improve his fluency, and accommodations by the school such as increased time on assignments, etc. We are pursuing a 504 with the school right now (meeting is in 3 weeks to get it set). All of his teachers, after reading the results of his dyslexia evaluation, which included his WPPSI testing results too, and then applying that to their observations of him over the course of the school year, agree that accommodations/adaptations make sense for him, which leads me to think that such accommodations would benefit your DS based on your post.
I will note that our 1st grade teacher told us that it's very common for readers this age to have problems with all of the things your DS and our DS experience. In my mind, it's the difference between their overall cognitive abilities and their reading/writing performance that start to raise flags.
