You mention that the OLSAT testing is to qualify for further testing. Can you find out what that further testing is? Can you find out if there are other ways to still do the further testing (as in going private or if the school would be able to continue with further testing based on a teacher endorsement or something...)? I assume all of this is to qualify for some sort of gifted program in which case you might be able to figure out the above by reading the criteria for applying/entering whatever program it is (assuming of course that it is documented somewhere...).
I'll add that I have a kid that who scored much, much higher on an actual IQ test than for our countries version of the CogAT. Luckily our board accepted the IQ test scores instead although we had to pay to test him privately.
