Have you tried not using the computer and writing out short commonly used words on card, then cutting them into two and three letter components which can be reassembled into new words ? It worked for me when I was learning to read years ago. I was nearly 7 years old and couldn't read yet, until my parents discovered it during summer holidays. A wonderful teacher gave me one on one tutoring in the evenings which did the trick. I know I'm not stupid as I have been tested at 164 with MENSA's IQ test, so maybe my experience will help your lad.