I'm kind of shocked to hear about a school that actually will hold a kid back for any reason. I have friends that are fighting their school trying to get them to hold their kid back and the school absolutely refuses. I have no idea what the rules are like where you are but I would be really surprised if they would, even more so with a kid with newly identified LDs. I'd argue that work prior to accommodations (I'm assuming he has some sort of accommodations in his new IEP) is completely meaningless.