I'm not sure what Jane or Julie's reading level is, but keep in mind that a grade level equivalent given on an achievement test is not actually the grade level the child is reading at. In the example you give, the grade equivalent reading level of 8.6 means that the child scored as well as an eighth grader would have taking the same test. (I hope I am stating this correctly!
I think m2gts is exactly right. Those scores can be kind of confusing, can't they?
Here's a real-life example that uses math scores and so is easier to interpret: DS9 had an overall grade equivalent of 12.9 on his 6th grade standardized math test a few months ago. To me, grade level 12.9 means end of senior year in high school, or the end of either HS calculus or Advanced Math.
NO WAY is DS9 there. What the result meant was that an average end-HS senior should get the same score as DS9 had (presumably, no or almost no mistakes).
(IMHO, the results slips could explain those "grade equivalents" a bit more clearly.)
Val