koolaidmoms- we have a problem with youngest DS and the "doing math in your head" thing too. Since he's a few years older than your DS I'll tell you what happened to us. In kg-1st-2nd grade he didn't like to show his work because he was doing it in his head no problem. I had several discussions with teachers about that. And basically, wanted them to lay off, because the truth is, we have no idea how he's processing that stuff, and I suspected however he's doing it wasn't the same way they were teaching it. Then somewhere around the middle of 2nd grade, they started doing problems where they were carrying or borrowing, and DS was lost. He just didn't "get" it, and now since he hadn't been showing his work, we were starting from scratch. The way I figured it was, while he could memorize basic facts really well, there would come a point (unless he was totally math savant) where he would have to start figuring the problems out on paper at least a little bit. If he somehow could still carry or borrow without writing it down, then maybe it would start when he got to fractions. Or even if it took all the way to algebra, at some point he wasn't going to be able to completely process it in his head. What I told him was, that even though he might not figure out the problems that way, he was going to have to write it down that way for the teacher to count it right.
His handwriting is awful too. He has keyboarding on his IEP, the school recognizes that he will probably need to switch to typing papers in the future. But for now they're just putting up with the messy writing.