I feel for you!
We're going the homeschool route for kindergarten because our district is bad, but I think you may be better off leaving her in class, appreciating that she is behind, and bringing her up to speed. I wouldn't take her back to kindergarten, personally. Think of kids who move to foreign countries and have to just "catch up". My good friend moved to Germany in 3rd grade, spoke no German, and by the end of the year was up to speed with class work and speaking German.
What I MIGHT do, if you are able to schedule wise, is homeschool her until 2nd grade. Use this year to get her completely caught up on her reading and writing and all the material she would get in a good school for kindergarten and 1st grade. All the materials are available to you, and rather than just doing a couple hrs a day for regular 1st grade, you may have to do more, but she can be all caught up by second grade.
If not, I would leave her where she is, get the same materials, and hang in there and help her catch up after school. If she masters all the material in the books "What you Kindergartner should know and What your First Grader should know" plus workbooks thru 1st grade level (available at target, wal mart, amazon), she should be up to speed. Everyone needs to be patient. She'll catch up! Good luck!