Wow - sounds like there are a lot of moving parts here. In most situations like this there is more than one side of the story. I think reality is probably somewhere in between your interpretation and the school's.
I think that you may be stressing your child out too much and perhaps his reactions to the stress caused his classwork to suffer last Spring - which could be why they held him back last Spring. I cannot imagine a school, no matter what their impression of the parent, would hold back a child without some good reason.
I'm not a huge fan of public schools - although I don't have the resources to send my kids to private schools. And while I've experienced good and bad teachers and good and bad administrators I can not see that there would be a few who would agree together to keep a child back because the don't like the parent. If that were the case there would be a lot of kids held back. If a child is held back there have to be a few teahers/adminstrators who agree to the findings. I tend to think that athoug he's a bright child, he responded to the stress of the situation - which is perfectly normal.
I guess I don't understand why you were so insistent that a "substitute" teacher would not be able to prepare your child for 3rd grade - so I tend to think you over-reacted. Teachers get pregnant and have babies - but schools arrange the subs months in advance and the pregnant teacher and new sub work together before the baby comes, after school on lesson plans, students' needs, etc. If you created a huge firestorm over this issue I could see that the school would think of you as a difficult person - but they would not take it out on your kid to the extent that they'd hold him back.
Now - what to do with the current situation - clearly your son did learn enough for 3rd grade as he's now testing close to the appropriate level. Smart children like your son, can percieve underlying issues and then they react to them subconsciously. I would be that he didn't do well in the clasroom at the end of last year in reaction to all of the drama. I also have a feeling that much of his discomfort with his current situation is also a reaction to how you've responded to all of this. I'm not sure what purpose was served by pulling him out of sports or not allowing him to do what he normally does over the Summer. He may feel like he's been punished for something out of his control so he feels ashamed.
My son has alwasy needed special ed for certain things - other things he's very smart about. I have never given h im any impression except that he needs help with readying and it's a good thing that we live in a country where he can get the help - since there are places in the world where he'd have never had the help that has brought him so very far.
Let this year pass - if he's doing 2nd grade over and he's really ready for 3rd grade that will be noticed soon enough. I've known other kids who've been held back and they ended up doing wonderfully. He can be the kid who helps others with their reading or math, he can really excel. My daughter who tests very high was an immature child and was nearly held back at this age not becuase of her lack of intelligence but because she was immature and would cry easily. I wasn't sure what to do or how to respond - so I prayed about it. God cares about the tiny details of your life and if you're too busy taking matters in to your own hands he will let you - and you can never do as well as God can. But if you step aside and ask for His best for your child God will provide it.
Schools do want parental involvement but they want someone to come along side and offer assistance. No one responds well when put on the defensive.
Good luck Mamma - let your boy relax and be who God intends him to be. He may have a fabulous year and be pushed back to his regular grade - I've seen it happen.