It sounds like your daughter is falling farther and farther behind, and they don't think they can meet her needs in a regular classroom with " recource pull-outs."
I'm concerned, because if she's already had an IEP for 3 years, that means she was identified as having special needs in 3rd grade, and she doesn't seem to have caught up in the timeframe that they've been working with her. You have a right, as a parent, to request IEP meetings whenever you feel their methods aren't working, and you can ask for "retesting" sooner than 3 years.
I know there's not much time left before summer, but I would submit a written request for testing NOW, not waiting for fall, so that you know where your daughter is at, progresswise, and you can make a better placement decision. They technically can't change her placement without your agreement, and you don't have enough information yet.
I'd like to suggest that you join more of us parents of LD kids at community.greatschools.net/groups/11554 and you can learn more about your Special Education rights at www.wrightslaw.com