That history does sound consistent with an OWL LD where significant remediation has been applied to the O. It sounds like he continues to display effects in more complex spontaneous language, but if you can keep his accommodations in place (and ultimately teach him to cue himself), oral language will probably be okay.
So if I'm getting the picture clearly, his spontaneous oral language expression is strong in many areas, but weak in organization, fluency, and elaboration, and perhaps in speaking to the audience. His scaffolded oral language expression (when you provide accommodations and prompts) is good. His spontaneous written expression is limited. I think this is what you want to convey to the school, or help them to document on either a norm-referenced instrument, or a widely-accepted rubric.
I would agree that addressing spelling will free up mental energy for higher-level written expression, much like reaching automaticity with math facts frees up working memory for problem solving.
