First, I am sorry to hear that your DS was denied services. Perhaps you should at least look into the possibility of an appeal or retest. My first guess was that he must have had a bad test day or is just bad at standardized test.
Second, the district's math seems off. ITBS is a solid on-level assessment. It's well-respected but not meant to be particularly difficult. 95% Cogat plus 95% ITBS should yield much higher than top 1%. I have seen stats somewhere but can't recall that estimate IQ & achievement overlaps. Anyhow, my guess would have been 3% to 4% qualifying. I realize that not every district is huge like ours, but even using their 1% estimate to arrive at only 1 qualifying student (per grade?) would mean that there is only about 100 students total per grade in the whole district? Our elementary school (one of dozens in our district) had more than 150 students per grade.
Anyhow, the scores are quite low in view of the fact that your DS is working 1-2 levels ahead at school and supplementing at home as well. Other possibilities may be he has gaps at his own grade level. For example, a 2nd grade test would still have phonics type questions although vocabulary and reading comprehension questions should not require any special teaching at the 2nd grade level.
