FWIW, this is what the school did for my DS after testing, talking, meeting, etc....
DSthen8 started out in 3rd, but going to 4th for reading (school wide ability grouping for reading). Once all testing was completed and the meetings were had, it was decided that he would do academics with the same 4th grade teacher, but stay with 3rd grade class for lunch, recess, field trips, things of that nature. The school didn't want to totally disrupt the social aspect as he'd made friends and seemed to just start fitting in a little better (we had moved that year). He did just fine in 4th socially, too, but he'd been in 3rd through the identification process which was about half the year.
At the end of the year, his report card showed promotion to 5th and reflected completion of 3rd/4th simultaneously. Everyone was in agreement and it really seemed to be a very smooth transition. Don't know if it'll help or not, but just another option to present maybe???
Good luck to you.
