Update:
We have decided to go with option A. DS7 will attend 3rd grade next year with his friends. He will go to 4th grade for math and an enrichment program (not exactly a GT program but is offered to select children).
I met the teacher he will be having and so far so good. She seems to look forward to having DS7 and seems to be looking forward to individualizing for him. She admits that she runs a pretty strict classroom with high expectations and plans to meet with the current teacher to discuss strategy in dealing with his behavior prior to next fall. She also wants me to e-mail her a list of current interests at the end of the summer so that they can find a good connection right off the bat.
Overall I am happy with this plan since DS7 has come so far socially this year and I honestly don't want to skip him through elementary school so fast and he is already 1 year grade accelerated.