Hi Shugarlips,
I am no expert, but I will tell you my experience of primary school so far.
My DS is a summer birthday boy too (born in June). He started school last September in Year R.
He coped fine, although he was knackered when he got home from school - probably for the first two terms.
Yes, I believe that 4 is too young to start school. However, your DS would be very, very disadvantaged by starting school at age 5.1 in Year 1, without having gone into Year R first. Whatever his nursery might say (and I don't know what they say, but bear with me!), going to nursery is not the same as being in Year R at school. For a start, the pupil:teacher ratio is different. The whole structure of the day is different. Whilst they still learn through play in Year R, the children are expected to go to the toilet on their own, put on their own shoes, carry their lunch tray or packed lunch to the table (with help available, of course) .... so many more things are expected of them.
Ultimately you won't be holding your DS back if you keep him out of Year R, but remember that it is designed to introduce children to the concept of school, and that whilst many children do learn loads in the first year in terms of reading and writing, many do not really get going until year 1 or Year 2 but would not have done so if they hadn't done the Year R foundation year first.
WHy not start your DS at the school out of the area and, if you're not happy with it when a place becomes available at one of your 3 waiting-list choices, move him to one of those in due course? I have just moved my DS - actually at half-term in the summer term - to a new school, and he coped brilliantly, not a tear was shed and he is very, very happy - so I don't think that moving schools should necessarily put you off.
I hope this helps you in some way. It's big decision; good luck.