I would talk to the school again and ask why they are opposed to subject acceleration. Is it because it makes the schedule too complicated? I think most kids would probably be fine staying in the grade for their age as long as they get appropriate work in math and reading. For reading, most teachers do leveled groups. Or at the very least, allow the child to read books at their level. Math is more difficult. I understand not wanting to grade accelerate. As I said, I have one kid where we did it and it worked fine, but I don't think it would be a great idea for the younger one. He is in first grade and is ready to learn long division and just learned multiplication like 96X42. It would be difficult to find another child like that in his class even if the teacher TRIED to do some kind of leveled group. She talked to me about "giving him second or third grade level math" and I was thinking is she just going to GIVE it to him, or is she going to teach him the concepts? How in the world is that going to work? I wrote back and said that I don't think it would be a good idea to give him work that he doesn't know yet without being instructed. Second grade would be fine, but I'm sure there are some third grade concepts he doesn't know yet.
Another option I had for her was putting him on the computer. We have a subscription to ixl.com and she could put him on the computer while the rest of the class is learning how to do 2+2. She agreed that would be fine, but hasn't put him on the computer at all yet. Maybe it would work with other teachers, which is why I'm bringing it up.
DS has actually ASKED her to give him harder math and she still hasn't done anything.
It's a difficult situation and it depends a lot on the teacher and how the classroom schedule works. DS has 22 other kids in his class of all different abilities and I don't think the teacher has time to teach him advanced concepts. So even though he is 2e I'm going to ask about having him subject accelerated with accommodations made for his disability. There's a strong chance it will be difficult to coordinate though (with schedules of 2 different grades).