Hi pfgvs, I don't know what area you are in, or what exactly your appeals argument was, but I gather that part of it was to do with spelling. I don't understand why spelling has any bearing on a child's ability to access the curriculum - very poor reading would, but spelling would not. Crazy.
You could comfort yourself (cold comfort I know) that even if you had persuaded them that your son was of sufficient academic ability, that you may have failed on the oversubscription part of of it. Getting a grammar place via the test is like winning the lottery, some appeals panels even more so.
If the head did not want more boys in his school he was going to come up with some argument to convince the panel, no matter how dumb the argument.
I do hope you have a back-up option that you are happy with. The Ed Psych tests suggest your boy is very bright, so he should do well elsewhere so long as the teaching is not hopeless all day every day. You have my sympathy. But I think you might be searching for answers and ways of understanding the process where there are none ---- it's bonkers basing an opinion of a child on their spelling ---- maybe this head knew that argument would appeal to that particular panel, and that particular panel were not particularly bright or questioning themselves. Who knows. But again you can only comfort yourself that you could have been appealing for Einstein himself and you would not have got him a place.
Maybe you are best off not using a school with a head who either believes so strongly that poor spelling means low ability, or is willing to pretend that he means this. There will be others who are not like this ----- but I'm sure it's nothing to do with grammar schools and children with poor spelling needing stools to stand on --- you have just been through a process which was probably just as chancey whatever the reasons for the child not having passed, and whatever case the headmaster gave against admitting another one.