I am so sorry to hear this story! I don't have a magic answer, but I have some questions for you that I had to think about when we went through a similar situation.

How badly do you want the children in this school? Is it worth paying for an IQ test even though they might not take it? Are you worried that even if you get in the correct grade that the teachers may not want the child there? As sad as that is to say, I saw it happen to my friends son.

In other words- is it worth it to fight this much? How does your child feel? Would you consider homeschooling or a private school or charter school?

Nobody can answer these questions except you and your husband. Every situation is different. My family chose the homeschool route and it feels great for us to NOT have to deal with schools. However, that is not the correct choice for everybody.

I wish you luck with this and I wish I could help- I can only send virtual hugs!