First of all, a child can be very gifted without reading that young. I have a son that literally would not sound out a word before kindergarten and came out of K reading at about the 5th grade level. He could do multiplication, addition, and subtraction before kindergarten. He hit the ceiling of the school's GT screener. My son never had interest in reading until he could read at his interest level (about 3rd to 4th grade level).
I think this is one of those cases where testing could really pay off for you - both in understanding your child behaviorally and in showing the school his needs. I'd wait for the results and go from there.
