KJP, have you seen the same type of social challenge in other situations? I'd second the poster above who suggested sitting in during class a few times if you can. It's easy for us to assume that the teacher isn't handling the situation appropriately, but I've also had the experience of discounting what a teacher is telling me and later realizing that although the teacher wasn't spot-on with what was happening, she was catching on to *something* important that as parents we just couldn't see at home.
It sounds like this has impacted your ds' self-esteem - not sure if it's just what's going on at school or something more - but I would want to put my effort into understanding what's going on at school before I automatically rushed to the conclusion that homeschooling or finding a "dream" school is going to solve the problem.
Best wishes,
polarbear
