How high have they tested him on the DRA? Do you know if they are testing him until he can't go any further or just testing up to grade level (this happened with our ds in early elementary; the school wouldn't test further).
This is jmo, and I'm just a parent, so take it fwiw! I personally think the DRA *should* be a better test for assessing reading comprehension level than the WJ-III - the WJ-III reading tests are very brief (at least what I've seen of them), and for the DRA (that our kids were tested with) the student had to read an entire book.
Another issue with using the WJ-III tests to argue for more challenge is that teachers aren't familiar with them (at least our teachers weren't lol), and they are familiar with the DRA.
So - my first direction here would be to be sure ds was assessed using the DRA going as far as he could go, and wasn't stopped at an artificial ceiling. If they come back and tell you that he was allowed to go as far as he could and he didn't get past grade level 3.0, tell them that doesn't match what you are seeing him read at home, please test him again. If you think he's reading a lot higher than where they have him, you might ask that they skip over a few levels and just *start* higher.
OTOH, if he's reading at 3.6 and they are testing him at 3.0 or just below, I don't know that the difference is large enough to make it worth a battle if you're in a tough position advocating for higher challenge in reading. You can still challenge him at home, and I'm guessing he'll be fine

Best wishes,
polarbear