How do you fight the school when they insist that you should be happy that your child is getting "perfect scores" on most of his work. The only errors are due to neatness and carelessness. They insist that these high grades mean that he is appropriately placed.
He is not emotionally mature enough for a grade skip although in other settings his natural peer group appears to be 2-3 years older than he is (He will be 9 in March.) He is physically unable to handle the increased writing requirements in higher levels without accomodations as well.
They assign so much busywork style homework each night that there is little time for him to pursue his interests or for us to afterschool. He is getting more and more depressed and frustrated. It is showing in the increase in careless errors in his classwork. The school interprets it as him being appropriately placed...
My gut feeling is that without any challenge, he is actually regressing in his rate of learning. I can't prove it since the school will not do any out of level testing with him. They just keep giving him at level tests that he ceilings out on and tell us nothing.
We have had private testing done that got us into a meaningless pullout program. He brought home the enrichment acticity sheets yesterday. He was doing those logic puzzles when he was 3 and 4. He is not off the charts like many of your children and we won't be applying to DYS. However, his love of learning is being extinguished and I'm at my wits end trying to figure out how to turn this situation around really appreciate your help.

Well, my eperience is that you have to do it slowly but very, very persistently. And it is not a guaranteed success either :-)
In my daughters case, the school would not even think twice about allowing her to grade skip at the beginning of the school year, but they were proposing it themselves by Christmas! (we didn't take it, if you are not familiar with my case:-) My daughter also is not off the charts, but she still manages to be the best student among 6th graders - she is in 5th but subject accelerated to 6th in Math and LA. She studies, does her homework deligently, but school seems to be easy for her. So I know, that even with her (as with my son) it will be a struggle to find challenging materials and proper environment. I take it one year at a time, but trying to think ahead as far as possible. For example, I am now looking for some online classes/programs that she will be able to do during LA next year. If the teacher stays the same, I know her very well and I am sure, that she will let me experiment. We have already talked about it. I am not sure if the school/principal has to be on board for everything? In your case, is that resistance coming from your DS teacher or from the school. I find that sometimes it is easier to talk to the teacher alone.
I totally understand your feeling about regression in the rate of learning due to no challenge. I am actually observing it in my almost 13 year old son. He is capable of so much more than he is being asked to do.
Pursue the school, do everything you can to make sure your child is challenged there. I do not believe in unschooling after school - even though we are supplementing both of our kids education. But I strongly believe that they go to school to learn and not to play! I want my kids to work their little butts off at the school and then come home and have time to play!