FWIW our district assumes most kids are above average, too, and sets benchmarks accordingly.
My DS5 is the only kid in the class who I'm very sure is reading more than 2 grades ahead. DS is the youngest and smallest in his class, and his math skills are good but not stunning for kindergarten; he is not a gradeskip candidate. He is obviously bored in the parts where they are learning letter sounds; but he likes other parts of being a kindergartner OK, and there was that nice reading pullout group, so for him it works. It's a half day program, which helps. I don't know that he'd like a whole day of the kindergarten curriculum; too much sitting still, too little imagining.
If you have a child who is not tolerant of boring or repetitive tasks, or a teacher who won't accommodate unusual needs (with things like book choice), it could be harder.
Some districts welcome parent input on teacher placement, and some don't; in any case, you'd probably do well to nicely let the principal and other stakeholders know, in a very matter of fact way, that your child is reading (names of books) at this point, and ask to have her placed with a teacher who might be able to accommodate that, so they have some clue what they're dealing with.
DeeDee
