There are two books that might be helpful in this situation. But both require cooperation from the school/teachers.
Teaching Gifted Kids in Today's Classroom (Winebrenner) has suggestions for how to differentiate instruction for gifted children in the regular classroom in a way that can potentially include all children. I am not a classroom teacher, but the suggestions seem pretty doable to me, though I think it would probably take a teacher a few years to get up to speed on all of them.
The other is Beyond Gifted Education (Peters, Matthews, McBee, and McCoach). This one is about how to organize schools so that all (well, most) children are placed so that they have access to intellectual peers. The fact that your school has all grades in one building aligns well with this method, but the small number of students will present challenges (possibly insurmountable ones).
I am going to be honest here. Institutions move very slowly. It is unlikely that you will be able to get any sort of program going in time for your children to benefit from it. At best, you're probably going to have to work year to year by feeding the teachers materials for your kids to use independently.
Someone else here can chime in on the 504 situation, but I think it's possible that what the school is doing is illegal (civil rights violation). A 504 plan will specify accommodations--like extra time for assignments/tests, permission to use a keyboard, the ability to have questions read aloud, etc. An IEP is what will specify any extra instruction, and this is what they can legally deny if your child is on grade level.
