They were supposed to be in 3rd grade.
Here is the best attempt to map the timelines.
http://www.wnd.com/?pageId=188801
I has an image of the original photo with Inoue’s mothers hand writing on it. It is clearly the Christmas Season as Christmas decorations can be seen in the background.
Here is another link with ‘fairytale version’.
http://en.wikipedia.org/wiki/Early_life_and_career_of_Barack_Obama
During the 1969 - 1970 school year Obama was supposed to be in Catholic school in Jakarta. The article also claims Obama would spend summers with his Grandparents in Hawaii. That is strange. Why? And who paid for it if you did? Maybe it was part of the SAD/SAS’s payment to be in Indonesia with the spooks.
The article on him meeting FMD for the first time was interesting. It says they first met in 1970. And maybe Obama II was traveling back to Hawaii as the wiki article says but the age would still off from the ‘fairytale version’. In 1970 Obama would be 8/9. He would not be 10 until August - 1971.
Maybe the 1969 photo was Obama visiting the Hawaii school while he was visiting for Christmas? Sometimes parents do that so kids can see their old friends/classmates?