I'm sensing I need to be more sensitive to her. But she always wants to be RIGHT, and this is a good lesson to her.

Really? What good lesson is she learning? Seriously, I just don't see it. She just skipped a grade, she's very young, and she's getting no cooperation or empathy from the teacher. She answered the problem correctly, but because it wasn't done a certain way, it's marked wrong. How was she supposed to know this? Again, not really sure what lesson this is teaching. Now, if it's a case of "the instructions said to answer using scientific notation, and although your answer was correct, it wasn't in scientific notation," well, that makes sense to me. My boys have had to learn to use the lovely EDM (everyday math) methods when the test says to, even if they could solve it more quickly another way. The "lesson" they learn is that they need to pay attention and read the directions carefully. And yes, maybe you wouldn't have cried for 20 minutes, but every kid is different. My ds10 still cries occasionally when he is frustrated. Ds8 lets things glide off him like water. They're just different kids who express themselves differently.
Your dd sounds like she needs some support and understanding as she makes this transition, and imho, you need to be her advocate and her champion as she does so.
Theresa