I'd allow her to receive the grade she has earned, with very little muss and fuss. That'll teach her the value of paying attention.
On the other hand, it does seem like the teacher could make an easy accommodation here. If your DD were allowed to begin the assignment as soon as she understands the directions, rather than wait to hear the same information half a dozen times, that would make it easier for her to pay attention. And if she misses something, by starting in too early... again, let the natural consequences unfold. If she starts in on the assignment while the teacher is still talking with the rest of the class, the only one being distracted is your DD.
We asked DD how she felt about the C and if she thought she was really doing her best - she was pretty apathetic to all of it.
I got the impression this teacher would view DD starting on the assignment (before she was done explaining everything over and over) as DD being a disruption. I understood her explanation as the students have to listen to her instructions until she is done and then they can do their work.
