I'm sorry you are having such trouble!  I promise you, you are not alone.  I encourage you to hold on, because in the end it will all work out.

My first impression is that you need to remove him from this school.  I can't imagine there is any situation that would justify a principal spanking your child, let alone on the first day of school.  It sounds as if the teacher is not much better at dealing with the 'bad blood' that the principal made.  

Now, because your home life is in transition, he undoubtedly feels some of the emotions coming off you and your husband, no matter how hard you try to hide it.  

Little kids can only communicate so much.  He is probably frustrated, right from the first day of school, and it has snowballed out of control.  Perhaps removing him from this school, waiting until this coming fall, and trying a different school with less drama in the teaching ranks, would work well for him.  

We put our son into what looked like an awesome K-4 program.  10 days later, the teacher called us to tell us that our son was disruptive and trying to actually exit the school.  The teaching aide was required to monitor him alone and couldn't attend to any other students.  When they tried to discuss it with him, he wouldn't answer them.  They said they were unable to do any testing with him and recommended we consider having him assessed.  

As you can imagine, this was shocking as our son was always soft and kind and cheerful, always enjoying participating within groups and never being too naughty.  He had been very excited for school, but after the second day, we noticed he wasn't eating his lunch, that he wasn't smiling much, and just wasn't himself.  We would ask him how school was and he would say that it was fine.  

At first I didn't know what to do.  Then I decided I was going to trust my son and ask the teacher more questions.  That's when I discovered that the second day of school, my son was playing catch with another child (I discovered it was the teacher's daughter) when the ball hit the child in the face and broke the child's glasses by accident.  My son got very upset that he had done this, but still got a time out (which I never used at home).  This punishment led directly to him feeling that the teacher's 'love' was 'gone' and caused great frustration on his part.  He acted out, got time outs all day every day, and became the boy he felt she saw him as - the 'naughty' boy, the 'disruptive' boy.  He even went so far as to try to leave the school one day.

I was so mad at the teacher and the school that I pulled him out then and there!  They were teachers and should have known how to handle the situation without punishing him so severely, or even at all.  I believe they knew they were in the wrong and tried to cast aspersions on my son, making it his fault in my mind.

I sat him down, told him he wasn't going back to that school, and I decided to tell him the truth about the situation in a way he could understand.  I told him that his teacher did love him, but that she was such a bad teacher, she didn't know how to show it.  I spent the next several months before kindergarten with him at home, undoing the damage that the teacher did and helping him understand that school is fun.

He is now in the middle of 1st grade, doing great, following instructions, and learning cool things every day.  The little boy from preschool disappeared the day that school disappeared.

Again, I feel for you and have been in your shoes.  Between the upheaval at home and the insane teachers at his school, he sounds like he's seriously frustrated.  You don't need to pay extra to have them convince him he's a 'bad boy'.  Pull him out, spend time having fun and helping him deal with his frustrations in a positive way.  Have him help out with the family so that he feels as though he's value-added to you.  Let him rest and play loads of educational games, visit the library, and just snuggle and hug a lot!  Love works well with children.