There are some things you can do re directions. One that was suggested to me for my son that worked extremely well was to read the instruction/direction to him, have him repeat it back to me, then read it to him again. Another way that I developed to make home life easier for him was to create a picture board with a sequence of instructions/directions on it. I started with 3 directions and built it to 6 (when we started he could only follow a single instruction at a time). There was a picture of the task, a simple sentence that described the task and a space to mark when he'd done it. I put it in a highly visible place (eg bathroom mirror, fridge door etc) and walked him through it with lots of praise and encouragement, it didn't take too long for him to be able to follow more than 1 direction at a time. His short term memory increased with time and practice.
As I don't live in the US I can't help you with testing locations. Sorry.
I would have serious concerns about his teacher penalising him so severely - especially when she knows that he has difficulties. That would be seriously eroding his self-esteem and confidence. When you talk with her again ask her why she is so set on destroying his confidence - especially given he works so hard to learn his spelling and has an oral 100%. Perhaps she is working from the mistaken belief that if she marks him wrong then he will "make the effort to improve". She might not understand the nature of dyslexia and how difficult it can be. Or the effect on self-esteem and learning that a overly critical teacher can have. I am not sure on the policy of reversals but I would think that given that your son has been identified as having difficulties, some leeway with his work (given that it is a reversal not a substitution of another letter) would be the norm.
Does his school have an LD policy? It might be helpful to refer to this and see what special considerations they have. Also, I would refer to the state policy on LD's in school to see if there are any recommendations there that could be of use to you. Also, you might have a district organisation (here in Australia, we have SPELD) that can give you guidelines for making learning easier. If you have access to an educational psychiatrist, they can also tell you what guidelines are normal for your area.
Personally, I would be seeking to discuss with not only your child's teacher but principle, guidance officer and literacy co-ordinator (if you have them) an alternative form of assessment for your son's knowledge and competency levels. He obviously works hard to succeed - and he needs people around him that support him.
Cheers,
Diana
