Thank you all, this is great info!

Grinity - any ideas on how to find a pychoedu evaluator? We've never done that. She was only ever tested by Dr. Ruf when she was almost 6. I think it is vital we get a better picture. Particulary because we have ADHD/anxiety/mood issues with some of my other kids. And this dd has shown a few signs of dyslexia.

My husband agrees that she needed this "shock" and still does otherwise she would have continued to just slide by and not get motiviated. She would severly underachieve if given the chance. That is just her personality. If it requires effort, she's not interested:)

I've got to talk with the teacher a bit more. He's a very positive "it will all be fine..." sort of guy so it's hard to know. I do know that recently dd has really jumped in maturity or something. She just did a big presentation on a country and really went all out for it. I was impressed that she had it in her. She is doing awesome in spelling and writing (this was completely awful at the beginning of the year.) Main issue right now is the math. The school would probably be open to whatever I ask. So I love the idea of maybe staying down a grade for Math and moving on for the others? That might be good for her.

I can totally see where my dd would have thrived with this skip if it had been in a regular classroom. The regular 2nd grade work would have been a perfect fit. Instead, this Gifted class of kids all a year older is much more challenging.

I need to confirm that she is actually doing worse than 90-95% of the kids. I guess I'm basing that on what I see of the other kids work when in the classroom and what she says about her performance being the worst of everyone. I think that she knows more than she takes the time to show on things like the NWEA Maps, etc.
Basically, she just wants to do her own thing and not be bothered with school. In fact, she has said that she's glad to have skipped a grade so she "gets done with school faster....." I think I'm in for a long road with this child.

I guess I am just trying to do what's best for her but not sure if I can ever really know what that is. I feel like either choice has consequences. Even though my gut is telling me to pull the plug on the acceleration, I don't know if I can do it. I'm afraid there may be some self esteem issues that might be even worse if she has to stay back next year.

Uggh, who knew this would all be so complicated!