I would really be upset about the 504 not being implemented. I think I'd go to the principal if it was not handled before grading period. My only advice there is to not worry about grades, since it wasn't in place, and just focus on whether he is learning or not for now.
About the cultural diversity project...I can understand that American Indians should be represented, but I'm thinking that the teacher's comment about not learning this "at this time" means that it will come up later - perhaps a whole unit?
I don't know where you live, but I know in CA, 5th grade spends a good part of the year learning about Am Indians all over the country, so maybe that's around the corner? If so, maybe your child would be interested in sharing or contributing to the unit, making it more personal to the class.
