Hi Mommyj2,
My DS skipped 3rd and then skipped 5th; so he's 9 and is in 6th.
I may understand part of what you're going through. When the first skip was offered by the school, it was a cool idea much more than anything. Great! It was a no-brainer.
Skipping one grade didn't seem like a big deal in the way that skipping two did. I'll admit to feeling a bit freaked out at the idea of sending him to school with kids who were all so much older than him (remember he was starting middle school, so he'd be the youngest kid in the whole school AND he also wouldn't know anyone). We had to think about the idea. In the end, we decided that it would be the best thing to do. NB, I got him a cell phone to make it easier for him to stay in touch if he felt like he needed to talk to me.
Fast forward. It took him a couple months to get used to the flow things of middle school. At first, I had to help him almost constantly with his work. Now this is starting to ease off (Grinity once mentioned this had happened with her and her son). He is NOT getting all As, but his non-A grades are going up. He does get As in some subjects (but he has to work for them now). Socially, he fits in, is very happy, and is finally learning and facing challenges. YMMV.
He started taking a stuffed animal to school in October; I was concerned that the other kids would laugh, but they responded by...bringing in their own stuffed animals. This last thing was really wonderful for me to see.
He's an outgoing kid and is good at sports, so these are pluses. He also goes to a small private school that gives above grade-level work as appropriate; I don't know how different a large public school system is.
You said your district is gifted-friendly. So, does this mean that other kids have skipped grades? If so, the idea might seem "normal" to the other kids, if you see what I mean. Also, it might be easier for him to go to 5th grade now and then join his new class in middle school, rather than just starting out in 7th grade in middle school if he skips again. Getting used to middle school was kind of hard for my DS at first.
Another point to consider: subjects in middle school are more detailed and more varied than subjects in primary school. For example, my DS is in a wonderful survey course of world history. So in making the decision, you might want to look at what he'll skip in the rest of 3rd and 4th, compared to what he'd have to skip in a higher grade if he did another skip later.
Okay, this was really long. This is just my 2c; YMMV!
Val