My DD10 also had math issues early on, based on a number of different things. One was that she would look for patterns in her papers rather than actually try to answer the questions, so she never got it done in class and therefor the teacher decided she couldn't do it. (She would look to see how many times a certain addition or multiplication was written on the page in how many different ways.) It was also everyday math.
She also had some teachers who decided that math was all about speed and nothing else really matters - for a kid who was tuning out during instruction time and looking for patterns this was dreadful. She ended up believing she couldn't do math for a couple of years. It wasn't until we started showing her some of the more complicated math stuff, like fractals and computer programming and some physics problems that she realized that math could be fun and interesting and something that she could sink her teeth into.
She too was "fuzzy" on her multiplication facts - for the same reason - it would take too much time and effort to memorize something she had understood how to do for years before needing it in class.
We tried making math games, playing them on the computer, talking to mathematicians and others that use math in their field and basically it took a really good teacher talking to her about how smart she was and allowing her to ask more advanced questions that seemed unrelated to the topic being taught to convince her that she was good at math. Even this year we had to talk to her math teacher at the beginning of the year and let him in on her feelings towards math because it was affecting her success.
She may also simply be looking at the math in a different way than what is being taught.
I would not move her back down a level because that would confirm in her mind that she is not good at math and then it would be almost impossible to change that opinion again.
