Hi Mary,
My first thought is to try and find out the motivations behind the behavior. You already have found out that your DD doesn't want to read to you, because she's worried you would no longer read to her. That's a good start. Maybe if she were assured that you would still read to her, even if she knew how to do it herself, then she might be willing to show off her true skills?
My 5 y/o DD did a somewhat similar thing for the first half of K this year. She went in knowing how to read quite well, but didn't want to read at school. At home, she was reading many of her brother's books (2nd grader level or higher). Also at home, any time we tried to read books to her, she would impatiently stop us and say she wanted to read the rest to us.
But at school, when the teacher asked DD to read to her (teacher wanted to assess her reading level), DD flat out refused. Later, when I asked her why she didn't want to read at school, she told me she thought the other kids would laugh at her if they knew she could read. It really made me sad that she was "dumbing down" her abilities when the truth was that the other kids would have thought it was cool that she could read. But her perception of the social situation was that she didn't want to be different.
It wasn't until about mid-year, when some of the other kids in the class started being able to read a little bit, and others were desperately wishing they could read, that she started showing her true abilities. Then when there was an all-school reading contest, she really took off! Suddenly at that point her competitive nature took over and she didn't care who knew she could read.
What I learned from the experience is that she does have an awareness of being "different" and has some anxiety about it, and that she is very motivated by competition.
One thing you could try with your daughter is while you're reading books to her, occasionally say the wrong word. Make it something a little silly, and see if she catches it and corrects you. I used to do this with my daughter and it told me a lot about what she knew. Like if a sentence was "Susie went to the store," I might say "Susie went to the moon." And DD would say, "Mom! That doesn't say moon!" I'd say "Are you sure? How do you know?" She'd say, "Because moon starts with M and that word starts with an S!" So then I might say, "Oh, I see... it must say 'Susie went to the STEPS!'" And she'd say "No, it's STORE! She went to the STORE!"
Another little trick I've used is reverse psychology of sorts. Don't know how it would work for your DD, but my DD hates to be told she can't do something. So I might say "I'm going to read a book to you, and I want to read it all by myself. So don't help me at all, okay?" After a page or two of me reading, she'd be begging me to please let her read just a little bit of it... and soon she'd be reading the whole thing to me.
Hope this helps.
