There is so much I want to say I don't know where to begin. I will try and stay short and too the point in the hopes I relay what I believe IMO is the best way to start.
First, what do YOU think. Are his needs being met at your local school or do YOU believe that he needs more specialized instruction? I'm surprised his teacher said she thought he needed more specialized instruction, because if she admits this, your school district has to pay for another program. Most teachers will not say what type of program might better suit the child because it then obligates them to follow thru with it. I would begin with an austism society group in your area or someplace that can help you identify schools in your area that provide programs for kids on the autism spectrum. If there's still time I would even recommend visiting these schools to make sure they are appropriate for the function level of your child. I would then be prepared at the IEP to offer some suggestions on placement for your son. If his teacher believes he would be better served in another environment then you need to be in on the decision making process as to where he goes! Some of these schools, I know personally of Easter Seals here in the Chicagoland area can cost $10,000 - 15,000 a year for these kids, most special ed administrators are NOT wiling to put up that kind of money unless mom and dad are serious about placement.
I know nothing about your district or how well special ed is funded in CA. Out here, it is almost always a battle!
If he needs further evaluation, physchological profile, testing, your district is supposed to arrange and pay for these evaluations. Not you. You may have to have all of the testing done first, then reschedule the actual IEP until the results are in.
Remember always to advocate for your son no matter what. Ask questions and do what your gut says. All parties need to have an true assessment of where your child is, how he learns, how he socializes, how he processes information in order to make an apropriate placement.
Good luck and feel free to PM me if you want to chat more. I have a friend who has 2 children with Autism, I'm sure she'd be willing to talk to you.