One question you will want to ask before doing anything re: math is whether your DS's scores continue to go up. Are they doing fall MAP testing? If he is progressing in math and the scores stay high, he is probably learning new things, right? And if he is not progressing, you can bring that up with the school. He deserves to be taught new things so that he can progress.
Another thing to think about is whether there are other kids at his MAP levels, and if so, I would ask if he be placed with them. If these kids are pretty much all in higher grades, I suggest you keep pushing for placement with them, despite the school's mantra. Play Columbo and tell them how confused you are about why your kiddo cannot be placed with kids learning at his level.
In the meantime, if your kiddo is complaining and unhappy, I would seek out other outlets. There are more online options besides CTY. There is a pretty good description of them here (though it's a little dated):
http://www.davidsongifted.org/db/Articles_id_10642.aspx Some schools have allowed kids to work at their own pace on these online math options during regular math class, but you probably will have to do a lot of advocacy to get that.
You can look at the MAP scores here, appendix B, to see that the 229 falls in the 97th/98th percentile for 3rd graders in spring:
http://www.nwea.org/sites/www.nwea.org/files/resources/NWEA_2011_RIT_Scale_Norms.pdf
