Welcome!
From your description, it sounds like your DS decodes (reads) and encodes (spells) exceptionally well at the word level, but struggles significantly with higher level reading comprehension and written expression skills. He also tests with excellent rote memory. You don't report how he did on the subtests of the KBIT2, which would provide some more data on his cognition and reasoning skills, but it wouldn't be too strange if he could be classified as 2e based on what you report. On the other hand, there are some exceptionalities for which hyperlexia in the context of generally average cognition (or even below average cognition) is not that unusual, in which case this would not be the GT kind of dual exceptionality. And without knowing anything about his cognitive profile (in this case, the KBIT2), it's hard to say whether it's the basic reading and spelling skills that are the outlier splinter skills, or the reading comprehension and written expression that are the discrepant deficits.
Did you have him evaluated through the public schools, or privately? Is there any additional psychoeducational or neuropsychological evaluation in the offing? (Since the KBIT2 is a cognitive screener, and the KTEA-II is approaching two years out of date. Though maybe that was a typo, and should be the KTEA-III, which is new.) If there is not, I would consider a comprehensive psychoed/neuropsych evaluation, in addition to the developmental pedi.
