As the parent of a kid who is still suffering the consequences of a school experience similar to what you are describing I would absolutely pull him. The sooner the better. "Taking the position that he needs to 'learn to do it himself' this year" is a HUGE red flag that they do not get and do not intend to honor his needs for differentiation. I would not expect it to get better.
Try not to over think the "mediocre" status of the more supportive school. Rigorous academics are not going to help if his LD issues prevent him from accessing the curriculum. It sounds to me like he needs to be set up for success wherever that may be. A non-supportive or overly challenging environment probably won't be the best in that regard.
I agree with Dbat about the immediate transfer to #1 while you get on a waiting list for #2. If he is comfortable and successful at #1 you don't have to transfer him. The bible study thing would be a major problem for me personally but if it suits your family I am guessing you could live with the 4 year requirement if everything else was working for him. And please don't underestimate the importance of a school that *gets* LD. The program within a program with access to technology sounds really awesome. I would go for that without a second thought.
Good luck and please don't be so hard on yourself. You have identified 3 possible school alternatives to address the problem of an unsafe public option. As I have said on these boards all of this stuff has a HUGE learning curve. You are more than half way there and are doing the right thing by asking for input from other voices of experience. I'm sure you do that at work too - seek input and examine data - this just feels different. You really are doing great even if it doesn't feel like it right now.
{hugs} Hang in there!
