Okay, well, you're correct that your school (virtual or otherwise) HAS to follow procedural guidelines in writing an IEP.
Those guidelines are very much about the child's disability(ies) driving the services and accommodations. At least that is the theory.
But this is where pragmatically, there can be a complete breakdown, which is what I'm guessing is happening here. They can see that what they have on the menu isn't helping, and that nothing else on the menu seems likely to, either. Which is where you are now-- they don't KNOW what to do, and they aren't going to go looking, either, because what ISN'T on the menu is: a) difficult, b) unfamiliar, and most likely c) way more costly or problematic to implement.
Virtual charter schools in particular seem to be very...er... fixated on this last point, I might add.
It's good that you have educators working with you who understand that there IS a problem.
I see no reason why YOU should be on the hook for outside testing related to clear possible learning problems, however. Why won't THEY pay for (or provide) an evaluation for dyslexia? That should be PART of a complete eval in light of her family history, shouldn't it?? I'm really kind of scratching my head on that one. What has the school done in terms of evaluation?
And by "school" here, I mean not just the virtual school-- but also your districted school.
I also wouldn't necessarily judge your local school's ability to help with special ed needs on the basis of your GT older child. There isn't any federal law behind GT. For your younger child, ironically, you have MUCH more leverage. Provided that you can figure out what is going on and what to do about it. It doesn't sound to me as though anyone that you're working with has yet clearly identified exactly what the nature of the problem is, mechanistically speaking. I mean, yes, you have a handful of diagnoses, but you don't really have a firm connection to the particular learning difficulties that she's having. KWIM? That leaves all of you without a way to leverage change for the better-- because you don't know which lever to use.
It just seems far more likely that a B&M setting is going to have a wider array of options to choose from. As noted above, it's when your needs are way outside of ANY of those options that you begin to have trouble.
Please note that I have no expertise at all with the particular challenges that you're facing her-- other than familiarity with how cyberschools approach special needs as a general thing.