Sorry to hear this.
118 seems a reasonable score, and the 98th percentile for VR (WISC or BAS, I assume) is impressive.
It is, in fact, very difficult to challenge a panel's judgement - there has to be a significant fault with the process to get anywhere with a complaint.
Complaints about academies are dealt with by the EFA. See this section:http://www.elevenplusexams.co.uk/appeals/ombudsman
I suspect they may want you to have gone to an appeal first, because an appeal is the obvious remedy. An appeal panel can look again at the review process (including how the the disability issue was handled), and, if they find the review was not fair, consistent or objective, they can take a completely fresh look at the question of disability and at the case for selection.
For dyslexia to count as a disability it would have to be substantial (the definition for which is: more than minor or trivial
In the event of a successful appeal against the review process and for selection, you don't have to take things any further if you don't want to You're free to say "Thank you, but we've decided to keep the Upper School place after all