In my opinion the more of a big deal you make of it at home the more ingrained that you think he is a failure will be during the school hours. You need to find out what is at the root of the behaviors and work on that, not flash cards and making him read. You said if his behaviors were better he would be above grade level. You are just reinforcing this by "punishing" him at home by making him do extra work.
I think he needs someone to talk to, maybe an adult friend, maybe hubby, maybe a school counselor can observe him in class and then be able to let you know their observations as to what might be triggering his actions.
I know that math was my biggy. I would get punished during home work time if I made a mistake. To this day if I am presented with an algebra problem I will start crying and the thought loops going around in my head are so very negative that I almost feel suicidal. I don't mean normal punishment, I mean beating me with a belt buckle until my legs were bleeding. So I know what it's like to have thought loops going on in my head when it's home work time.
He may need a break from home work too. He may need to do stuff for a few weeks that he has mastered and start to feel really good about himself. Then after Christmas Break he can start again with the stuff up to level and then really work on REWARDING him for good days, for reading a page with no mistakes, for doing a simple word that is spelled correctly. Rewards tell him he is smart and that he is succeeding, not that he is a failure over and over.
I imaging you are constantly telling him he is doing well, he may need a behavior plan where everyone is on the same page, using the same phrases for praise, giving the same rewards for the same actions. Like if he sits for 1/2 of circle time, he gets X reward, maybe 15 minutes of free choice play in the room during a time when they can do separate activities.
Our boy is on a behavior plan and if he has even one star left at the end of the day he can use it to choose whatever activity center he wants, it's usually the computer where he plays games that are educational. He gets rewarded at home, each star kept gets him a better reward. They are pretty much the same as school but special time with one of us is one he really likes, another he likes is playing games on my Android phone. He can play games he has downloaded from the market during this time. He has about 14 pages of apps he has downloaded and he plays them all. He's all about the reward and it is really helping him to remember to keep his stars at school.