Yay momosam, it sounds like you have things in a really good place at school! Although like mon, I wonder how *truly* easy it is to move from 504 to IEP... but that's the cynic in me showing thanks to having been in a school district that is nowhere near as easy to work with as yours is so far
Re the written expression, like mon, I would definitely watch how it develops and support it at home (just as you're doing). I do not know if my ds' challenges with written expression (primarily generating ideas and getting his thoughts onto paper) are related to dysgraphia or separate (in origin)... but they were absolutely *masked* by his dysdgraphia in early elementary because everyone (from us to teachers to neuropsych) thought that once he was using typing and scribing the ideas would flow much more freely.. and they didn't. So we had a time lag of 1-2 years between diagnosing his dysgraphia and really understanding that there was a much larger issue with written expression in addition to his dysgraphia.
In your situation, I'd be interested in knowing how the extended time that the teacher has been working with your ds on his story compares to his classmates. It could be that everyone is working on developing a story over a long period of time, or it could be that your ds needs a bunch more time than anyone else - knowing which it is could be an important clue re the full impact of his written expression challenges.
I could probably write a novel about all the things that we've done with ds and written expression over the years.... here are a few brief (I hope!) thoughts that come to mind... I can fill in more if you want more ideas. Basically we worked with ds at home from 2nd - 4th grade, he had varying levels of support in school but nothing terribly helpful, and starting in 5th grade he began seeing an SLP privately (and still does). Beginning in 6th grade he had a bit more helpful help from school (helpful help... how's that for a technical term lol). Some of these ideas may be for later on since they are things we came up with over several years and some are from when our ds was older than your ds, but here they are fwiw!
* I scribed for ds whenever I could when he was doing writing assignments at home up until this year (7th grade) - he's now taking it upon himself to type or dictate most of his work. The reason I did this is ds' dysgraphia is fine-motor related and typing really isn't all that easy or fast for him either, even though it's faster than handwriting. I had him practice his typing when he *wasn't* doing a writing assignment because I felt it was more important for ds to be focusing on writing the content and getting his thoughts out than having the dual job of typing at the same time. This probably isn't necessary for most dysgraphics, but ds was extremely challenged with getting his thoughts out.
* We played games to help ds get his thoughts out. Any board-type game he wanted to, but we tried to use games that focused on generating words. This didn't necessarily have anything to do with what he had to write about, but we'd take turns brainstorming ideas or having me ask questions that he would answer - whoever one the turn would have to brainstorm an idea for their list.
* The game-playing was an idea that his speech therapist found worked for him. It was really invaluable for our ds to have speech therapy (it's all been focused on written expression, he can speak just fine, although he can't really "write" verbally... although he can talk incredibly advanced on subjects he knows something about and he can remember everything forever). Anyway, his speech therapist had never had a client like him before so she spent a lot of time just researching and trying different ideas, and we kept the ideas that worked and used them at home and encouraged ds to use what he could at school.
* Let ds get up and walk around while he was talking through whatever he needed to write - just another trick that helped him.
* Limit the amount of time he works on written assignments each day - for instance, right now he's only supposed to spend 15 minutes per writing assignment. He sets a timer, when it goes off, he has permission to be done. If he's not frustrated and wants to continue he can, but he also doesn't have to. One of the things that has really been negative for him is that when he is moving slow and has no idea what to write he can take a long time to produce almost nothing, and he gets very down and frustrated over it. The timer circumvents the frustration cycle from getting out of control.
* Finding a time of day to write when he's "fresh" - writing after a long day at school is tough, especially if it's a day when he's had to do a lot of writing in school (I can always tell just by looking at him at the end of the day if there was a writing assignment by the amount of pep and energy and perkiness in his smile and his step when he walks out of school - you can guess which direction the writing days take!). He has one type of ongoing brief writing assignment he has to do for one of his school classes that involves reading short passages and writing reflective thoughts. He struggled and struggled with this assignment until we discovered by accident that if he does the reading after school then tries the writing but nothing is working, he drops the writing and tries again (briefly) the next morning before leaving for school - and this works great - he usually has the idea that was so elusive the night before pop into his head without thinking about it during breakfast
* I would seriously consider getting a tutor or an SLP to work with your ds if writing truly seems to be a struggle. Although in your case, it sounds like if you wait through this year with the attentive teacher and willing staff, and document any struggle you see, you might be able to get services through your school.
Good luck!
polarbear