Has she seen the word "oatmeal" a lot on a breakfast box or something? What about the other hard words? That's the only part that seems a bit odd to me here, because I think being able to spell short words, like cat, while not really being able to read yet is fairly common. Some kids even learn to read by writing, in a way. My DD had many sight words and could break down and spell easy phonetic words lonnnnng before she could "really" read. DS was really different--he worked through phonetic readers methodically, having few sight words, and then made a leap to full reading. It's interesting how this skill develops!