Just to add what helped for me when about that age COMIC BOOKS.
When I was a younger kid, I didn’t read. I didn’t read anything that was assigned in school, I didn’t read for hobby, nothing. Just didn’t interest me in the least even if the book had a cool story or something. In fact, one summer, my dad tried to encourage my reading habits by offering me money to read some books (I think it was the Chronicles of Narnia) and write some basic book reports on them for him. It kinda worked - I skimmed some areas, faked it, and took the money.
Pretty much, until about sixth grade, I just didn’t care to read. But then, everything changed. I decided to read a Stephen King book and finished it in a week. Over the course of the next three or so years, I’d say I read hundreds of books, primarily horror or the like. I’ve never read or enjoyed childrens literature in the least. I just waited until I was a little older and jumped right into adult books.
What I’m trying to say is … I don’t know. There’s the outside chance that he’s just not interested right now and may be later. That’s what happened to me.
This may sound like advice that is contrary to what you’re trying to accomplish…but my daughter got a game boy color at age 6 and was interested in the pokemon games…One of the things that made her a better reader was playing with the game boy…because there was no way you could play Pokemon without being able to read. She also got into Roller Coaster Tycoon…another game that you have to be able to read to play.
Also…there is no substitute for you reading to and with him. Louis Sachar is a good author for boys who don’t like to read…He wrote Holes as well as the Marvin Redpost books and the Wayside School books. The Junie B. Jones books by Barbara Park are great, too…although the protagonist is a girl. A lot of older kids find Junie B. Jones funny and they are written at the high 1st-low 2nd grade level…so he might be able to read them himself…A lot of kids his age like the Magic Treehouse series.
The point is to get him to look forward to reading and get a little self-confidence. I hate to see a kids fail at reading over and over and get discouraged.
Reformed special educator chiming in:
Think very, very carefully before you accept the oft given advice to have your grandson tested for LD simply because his reading progress isn’t following some arbitrary curve laid down by the schools.
Every child is different.
There is a wide range of what we call ‘developmentally normal’.
Few people would ever disagree with the two statements above…until, that is, we start to talk about reading. Then it’s a heart stopping emergency if your child isn’t hitting the same milestones as quickly as the majority of his (sort of) peers, and everyone around you starts telling you the kid has a problem. Once you go down the label road you aren’t likely to ever come back, and once your grandson identifies as a special ed, disabled kid, his problems won’t be confined to the pace at which he embraces reading anymore.
I’m all for physical testing to rule out perception problems, and any good LD screening program will do all these tests. I say ‘good’ because I’ve had many students enter my program whose files contained no records of any such screening. Vision and hearing tests were my standard opening recommendation for kids entering my program, and while a fair few were found to have deficiencies, it never once changed the LD label. The fact that LD is a diagnosis of elimination (that is, if we rule out perception, psych, and environmental issues but there’s still a wide discrepancy between IQ and achievement) and will follow a child for life despite the apparent absence of any physical testing should tell you something about the machine that is producing these kids in ever growing numbers. This identification, once in place, is rarely dropped. Learning disablilities, like physical disabilities are something we teach our kids to compensate for and to cope with, we don’t teach them to overcome or lose their disability.
While I’ve taught a number of LD students over the years, I have to say the majority of students in my program were simply slow to embrace reading in their first few years of schooling. I’d like to think I did no harm to these students, but I’m afraid I was part of the system which broke them in the first place, and by the time I taught them in high school, any desire to read or learn had been pretty much kicked out of them by years of humiliating ‘slow kid’ labels.
Since leaving teaching, I’ve encountered quite a few parents who chose to homeschool rather than submit to pressures to have their children tagged and labeled for life. I’ve met two teenagers from different families who didn’t start reading at all until they were 9. They are perfectly normal children reading at ‘grade level’ within months of taking up the activity, and I can’t help but contrast them with most of the students who passed through my program. Of course, they don’t sit, classified by chronological age in a room full of their ‘peers’. They are homeschooled and suffer no ill social effects of their individualized reading pace.
Consider some of this before requesting a screen from the school. Make appointments with the eye doc and ear doc, then consider the possibility that he’s just not ready yet. Provide rich, fertile ground for the seeds of literacy to take root, try to relax, and read, read, read. Check out The Read Aloud Handbook for great ideas for age/interest appropriate books you can enjoy together. Getting lost in a good book is a treat he deserves whether he’s ready to start reading or not.
Good luck!
Yep, I got TONS of books I wouldn’t have been able to get, if not for Scholastic. The only complaint is that the books were poorly made-they tended to fall apart easily.
Some kids just don’t like to read. It’s not necessarily an indicator of learning disability, or anything else for that matter.
My kids grew up in a household that just reeked books. Their dad and I were nutso readers, and encouraged the kids at every step to become as obsessive as we were. They were read bedtime stories from the wee months, and they had good kiddie books as presents for birthdays and Christmas etc for many years.
And not one of the buggers ever picked up a book to read of their own until the age of around 15.
One of them is now a voracious reader, one will only read a book if it is for a school assignment, one will read when she doesn’t have a date on the weekend, and one will NOT READ AT ALL, as a matter of some misguided principle.
My philosophy remains the same. If there’s books there, the kids will read them…or maybe not. 
To second what others have recommended: comic books. Regular comic books as well as comic strip collections (Peanuts, Garfield, etc.). I can’t even begin to tell you how many new vocabulary words I learned from reading Peanuts collections.
Here’s a Reuters story:
http://stuff.co.nz/stuff/0,2106,3308259a4501,00.html
(of course, I’m biased, because I’m currently creating a series of graphic novels for kids that’s due out next year from Random House…)
Have you tried reverse psychology? Forbid him from reading! 
Or, more subtly, read (to yourself) some really lurid, juicy stuff while he’s around, and mention to him in no uncertain terms that he is not allowed to read those books until he grows up.
Just a suggestion—not necessarily a good suggestion… 
A suggestion from left-field: I run occasional D&D games with my young cousins (since they were eight), and they all absolutely adore the games. D&D pretty much requires good reading skills and decent math skills, but they’re slipped in between the fun of being a barbarian chopping giant spiders to pieces with a greataxe, or the thrill of being a wizard throwing lightning bolts at terrifying ogres. If your grandson is a fan of the fantastic, you could always try getting a starter D&D set and trying it out with him.
Daniel
Another vote for the Captain Underpants series, or books by the same author.
I have yet to meet a third grader who did not enjoy them… and have hooked some cousins on it when they went through a “reading is booooring” phase.
I’d like to thank everyone who responded so far for all the great suggestions.
I was home with him last week and had him read aloud for about 20 minutes each day from Shel Silverstein’s “Where the Sidewalk Ends”. I was actually surprised to see him sounding out some words I didn’t think he’d get. He does seem to have a bit of a problem distinguishing “b” and “d” sometimes. But the most disturbing thing was the way he started beating himself up when he couldn’t figure a word out - actually pounding his legs with his fists or crying.
That’s when I gave him the adult level talk about turning a negative into a positive - instead of calling yourself a terrible reader, turn it around and tell yourself that now you know a new word. I don’t know if it sunk in, but I’m going to keep trying.
As for his interests, he seems to love X-men and Teen Titans. I realize that these are mostly advertisements to sell action figures, but if they have comic books, that could be the spark that ignites the fire.
My main hope is that he doesn’t fall so far behind that he starts applying his own “inferior” label to himself. That could be a much deeper hole to climb out of.
The most frustrating thing about this is that my wife and I are paying big bucks to send him to a private Montessori school but he’s below grade level. The Montessori thing could be a double edged sword - they don’t force the kids to do everything, relying on their own natural curiosity to get themselves interested in whatever activity. But there might be more than the average population of high achievers in the school, so he could be seeing himself by comparison as a “terrible reader”, reducing any interest he might have had otherwise.
I was actually going to suggest shorter stories and poems. They aren’t as daunting as a gasp whole book. Shel Silverstein is good. He also has 'The Light In the Attic" Jack Preuletski (I think) wrote “New Kid on the Block” We were huge fans as children and I can still recite some of the poems. (There’s a new kid on the block, and boy that kid is tough…Sara Cynthia Sylvia Stout would not take the garbage out…) Also, I read the Encyclopedia Brown books, Choose Your Own Adventure books, Sideways Stories From Wayside High. He can read a few pages and not have to remember what he read to make the next story or chapter make sense. Since he has finished the story, he feels a sense of accomplishment, not dreading the rest of the book.
I would attach some sort of reward system. Book It got most of my classmates reading. Also, most libraries have Summer Reading Clubs where kids earn prizes for reading. Or you could set up you own reward system, like a coupon for every chapter read and 5 coupons earns you a trip to the beach, or something.
I am not a parent, so obviously, these are uninformed ideas. Maybe the SDMB? 
Sorry I am late to this.
Mom of a 7 year old boy in second grade this fall reading at nearly 4th grade level ( YAY ME!) and a Kindergartener Girl who is not like her brother at all.
This is what worked for me.
Get a cart on wheels or one of those luggage dolly things and attach a sturdy hand basket to it ( like the kind you get when you just need a few things at the store over the arm baskets) with zip strips.
Then make a specific day of the week Library Day and let him take out as many books as he is interested in that can fill the cart. Let him pick what books to read and throw in a few to dice things up. The library is your best friend.
Make a point of reading and having him see you read. When they see you read for pleasure, they make the connection that it is fun and not a chore.
Move your finger over the words as you read and on easier books, have him read one page for every page you read. A trade off so it is less intimidating.
If you have a dog ( or a cat) tell him that the animal loves storytime and would you read it a story. There is less intimidation in reading to a pet ( the attention whores that they are) than a family member or teacher. Pets accept us for who we are, not what we should be or think we should be. It is a boost to their confidence. Read to dogs
If he is frustrated I vote for having him tested. A cousin of mine (successful businessman.) found out after he was 35 that the reason why it was so stressful to read and tired him out was he had some really odd reading disorder that tired his eyes out because of the strain. It took several doctors until an Uber-specialist finally knew exactly what his problem was. (His eyes, not his brain.) He only figured it out when his one son was diagnosed with it as well. I can’t recall what the disorder is, sorry. He now wears glasses for reading and all is ok.
Second, third, fourth what everyone else has said re testing, book recommendations etc. I was going to suggest going for “subversive” stuff (i.e., anything the kids think the parents won’t approve of) - specifically Captain Underpants - but someone beat me to it. I heartily recomment those; in fact Dweezil, who is in 5th grade, still loves them.
Another option is books (comic books or otherwise) that tie into his favorite TV shows. I’ve never specifically looked for, say, Spongebob Squarepants or Ed Edd ‘n’ Eddie books, but if they exist, go for them. It doesn’t so much matter if they’re great literature or even all that well written, it’s just important to get him hooked on the idea that books can be fun. And if they’re something that the adults wouldn’t approve of, so much the better in his eyes.
Magic Schoolbus books - lots of pictures, not too heavy on the text, silly, and informative. Two thumbs up here.
Is he interested in anything in particular? Dweezil loves trains, and any train-related book gets his attention. It doesn’t matter if it’s “age-appropriate” (my kid would read board books as long as they dealt with trains).
He sounds a little like me. I have social anxiety and don’t like people watching me do things, especially things I don’t think I do very well.
You might want to try to get him to read silently, on his own, with a dictionary (or computer) nearby, so he can look up words he can’t figure out without anyone else having to know that he can’t figure them out.
I came back to this thread because I’d just thought of something (it hurt to think!)…
But what about the goodies in the LeapFrog series? They may be a little “Young” for him, but the upside would be that he could do that on his own. If he is stuck at a word, it will sound it out for him, and so forth and so on.
There are some excellent reading-related computer games out there that might help… especially for things he can do on his own, in his own time, without feeling the pressure to perform (if he is an anxious kid).
Wow - ok - I just checked out www.leapfrog.com and was surprised at the amount of stuff they HAVE. Holy crap! They start from infants to highschool stuff! They have a LARGE number of books and things for kids his age!
This may be a way to make reading fun. If memory serves, some of the activity books include games, and reading comprehension stuff, too. Maybe worth looking into.