I have advocated until I am blue in the face and know that it has been effective. I just don't know if that is enough.
This sort of thing goes by baby steps; you can't see now how it will turn out.
We stayed put (despite my urge to pick up my kid and run); it took a few years to really get things put together flawlessly, but thanks to long efforts we now have a school that is a pleasure to be in, that is 100% supportive of DS. From 3rd grade on, things have been awesome, not least because of our advocacy from K-2.
Can you have your advocate start sussing out now what teachers are available in the next grade, for next year? Observing them and gathering scuttlebutt about them, and being in conversation with the district people about what isn't working this year? I know the principal has the most say about classroom placement, but that seems a key part that would make your DD's life better. (I am scandalized about the current teacher; no child should have to suffer that. And mine did in 2nd grade, too, before the principal understood what was needed.) Teacher selection does not have to be luck of the draw; our advocate has always worked it out with the school, because for a kid with special needs, a teacher who is unwilling to help can be truly devastating.
What that teacher is doing to your DD is probably legally actionable; it's okay for your advocate to keep working on that with the district people, keeping pressure on the principal to mend the school's ways. I'd be disinclined to let it go on. Is there a better teacher in that grade she could switch to?
In other words the giftedness is being totally overshadowed by the disabilities. Totally.
Our experience was that way too in the early grades. We had to get DS functioning at school first; THEN he could fly. From 3rd on his gifts have been more and more recognized, and his problems growing steadily less. This is partly because we worked so hard on fixing problems in those early years, and partly because it is easier to shine in later grades, where it's not just reading mechanics and basic arithmetic that's being taught.
I thought of it as DS's alternative curriculum. While all the other kids were learning basic academic skills my DS already had, he was learning the social skills and self-regulation that would allow him to participate. For your DD it may well be that she's going to spend some time mastering the AT and learning to manage her own anxiety before she can fully show what she knows; but once she has it mastered, there will be no stopping her. Give her time to master her own curriculum.
The most positive statements I have received have been the former Director of Special Services saying "She WILL learn to decode eventually - it will take longer than other kids but she will get there." The neuropsych saying "Her dysgraphia isn't the worst I've seen" and the AT evaluator saying "She has a lot of challenges but she is so lucky to be born now when we have so much technology to help."
All good. And your DD has a very supportive family, which makes a huuuuge difference.
Her psychologist has said that Harvard and Yale are filled with kids like DD but no one else has said anything to indicate that they believe her strength will win out.
Can I recommend that you limit your worrying to the next 5 years? Because you can't see past that horizon. I believe that you should absolutely plan around the problems you can see now, and work as hard as you can on solving them with an eye to what lies ahead in the near term, but don't worry about Yale yet, because you can't see yet how far your DD will improve by then-- it's too far.
My gut tells me that the 2E school I found in New York may be necessary even if it means totally disrupting our family.
I think you're not done yet; if you can get a great classroom teacher in place for next year, it may well be worth staying. If not, you'll have to decide how many years you're willing to have your family apart or hugely inconvenienced. That's a tough one. For us, the right thing was to stay and keep working on it; that may not be the right thing for you.
You are doing a great job. Do remember to breathe sometimes. That's hard too, isn't it.
DeeDee
ETA: does your advocate know of another local option that would be better for your DD? Even within a district, schools vary widely in their capacity to teach kids with disabilities. It might not be the binary "here vs. New York" but a matter of finding a local treasure and making the case for an out of district placement at district's expense. You certainly have enough evidence to make the case that the district has failed your DD and they should pay for the alternative.