Hello. Mega post alert!!
To try answer some of your questions - it looks most like a physical dificulty with writing. She wriggles herself from sitting to kneeling to standing and back. She also says her arm aches and her pen hold is ok but clumsy and not a true tripod.
She actually has fairly imaginative and usefull ideas and is refining and learning that all the time, so she has good things to write. I feel she probably cuts down what she wants to say to avoid the dreaded writing. Her spelling in tests is perfect but she cannot apply it to writing sentences. Now Why Is That 
Indigo - we are hunting down a behavioural optometrist but blimey they are hard to come by in my neck of the woods. Plus I have financial dificulties - in that I have no finances.
Interesting what you day about believe she has dyslexia. What makes you say that? Because it is likely or because the things that help with dyslexia might help her too?
She has sensible and fairly good ideas about what she wants to write, but the process of writing seems to physically hard and slow for her. If that makes sense?
DO you think school et. al. will think I am insane if I take this bright, intelligent and (seemingly/on the face of it) happy child in to school and ask for a sence and CAMHS and all the nine yards??
Will you come to the meeting with me please? 
Takver - I'm sorry to hear of your own troubles. I wonder if you could contemplate a private assessment for your child? I know how it is, I have just taken a loan for the Ed Psych and will need to extend it if OT is required. However I tell myself that people get loans for cars and holidays and therefore just get on with it.
Is the sickness not being covered by anyone? Terrible!
Pastsellbydate - thank you for your kind words. It is very frustrating as I am not sure if her anxiety is writing only or a general state of being, either!! I bloody wish I did though. It would make the path I need to take much clearer!
Ponyprincess - you are right there is nothing actually crashingly wrong with her writing and perhaps many children in the class would love to be 40th centile. The trouble I have is that DD has herself decided she can't do literacy and her self esteem in all subjectsthat use writing is dropping like a stone. Plus it is clearly out of synch and that is just odd.
I am very worried about the idea of her deciding she can't do a subject. I feel that anyone who decides this may well go ahead and prove themselves right. It's such a sad thought that at 7 a little girl has already judged herself inferior in anything.
I am worried she may go one to decide she isn't good at numeracy, and at friends, or at learning, or playing, or being nice or being pretty and so on and so on. Adults with low self esteem often trace it back to childhood and to me, self esteem is one essential in life. A lack of it can lead to the most awful life tangles.
As to the very interesting debate about the actual importance of writing - personally I am probably of the opinion it does matter and that despite technology, writing isn't going away.
However the cleverest surgeons I know have some of the worst writing imaginable. SO I personally do not see it as a measure of success. I guess it is a tool, like speece, and tone of voice, and body language.
My main take is that at this time it is the thing dd feels bad about. I want to help her so much.
Oh and lifesalongsong - thank you. I hadn't actually considered a tutor. My main worry is that dd loves to be home, floating about and playing with random small toys. I sort of feel bad about intruding on that time. I wondered about assuming th erole of 'tutor' myself in regards to handwriting and following a sensible programe an OT would recommend.
It hadn't occured to me to get a tutor for more expansive and 'value added' learning. Hmmmm.
SO much to think about. When does my brain go quiet?
I am torn between pushing 'the services' to try get to the root cause of her anxiety or of her handwriting.
I feel I am over reacting and not reacting enough. I feel if I shout and stomp for assessments I will feel I have made it worse and put her in the spotlight.
If I don't and she has so much as a bad day at school, I will curse that I didn't support her and fight her good cause.
Jeeez.
Thank you for the opinions about trying to manufacture a state school opt out. Also regardign home ed [there just isn't the money for me not to work and I jsut couldn't make it work with my hours].
I am thinking. Thank you for all your posts - I am just going to read them all again.