Age 4 might be a bit young to diagnose dyslexia. I don't believe that just because he doesn't know his colors yet that he has dyslexia. Have they noticed that he reverses letters and when he speaks does he say things like, "I'm hot, I want my coat on", when he meant off.
My daughter was diagnosed with dyslexia in 1st grade because she could not read or identify the letters q, p, b, d. The good news is that the schools now can teach the dyslexic differently. My daughter learned to read by writing in sand and other colorful items with that texture, she could not sound out words so she learned red words. I am not a teacher so I don't know exactly how they taught her but she reads well.
She will graduate from high school this year with a B average. GREAT! She is super intelligent and learns more by hearing things than by reading them. I read to her sometimes.
It is true that some children reverse letters until late 2nd grade early 3rd grade, but there are a battery of tests that can be given as early as 1st grade to diagnose dyslexia and other learning disbilities. The school district's psycologist should do the testing. If the school suggests to have your child tested, please love him enough to do the testing. There is help in the school for him if he has dyslexia.