Wow. So sorry to hear this awful turn of events. The school district is acting terribly. If I were you, I’d sue the pants off of the district. She is entitled to a FAPE – free and appropriate public education – under section 504 of the federal Rehabilitation Act of 1973.
http://www2.ed.gov/about/offices/list/ocr/docs/edlite-FAPE504.html
Depending what state you are in, there could also be additional violations.
eta: Just noticed that you are in Mass. Obviously I have no idea what the law is there (I am not a lawyer), but Mass is a progressive state, and I imagine that they have strong protections.