Googling on "figure-ground, reading problem", I found this page, and some info on that sort of ability -

Visual Figure Ground--the ability to perceive and locate a form or object within a busy field without getting confused by the background or surrounding images. This skill keeps children from getting lost in details. Children with poor figure-ground become easily confused with too much print on the page, affecting their concentration and attention. They may also have difficulty scanning text to locate specific information.

http://www.childrensvision.com/reading.htm

I think Mam's comment, 'Should school be that hard for a child of average intelligence?' is on the mark. Something seems off, all the circumstantial information about the ear infections, the serious effort needed to read. I would have him checked out more thoroughly - even if he does have average iq, he is still struggling, right?

Chatting with a couple clinical neuropsychologists to see what tests they would suggest could be a place to start.

I do wish you and your ds the best of luck!!

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