Not sure what state that your in.... but check with your state education agency. If your child is having this much trouble then - there could possibly be a learning difference that she needs to tested for. If she does not qualify when tested --- then I would push for a 504. Also, check with your state - but as a parent I believe - you do not have to agree to the retention. Contact the special ed director in your district or call another district to find out your options in your state. But I would not allow retention a second time. In special education you have a protection that they have to modify her academics but keep her with age appropriate peers. They can not fail her if she is under the special ed umbrella. In Texas parents have alot of rights but are not always informed..... so ask questions and read up on your rights and go from there.
You can asks the principal if there is any chance of possibility you get your kid to there right grade! Then at summer study the grade level work from online! Your child has to study the work of which grade she wants to go. Then tell a administrator or principal to please give you a test for him/her to take! If they refuse tell them a exgatoration of a sad story about you child EX: My child has no friends and Is the first to fail in the family. He/ she feels really bad and has confidence that she can fix her mistake! Then see what y'all can do to get your child in the grade level she/ he belongs!