Hi, K.. Yes, indeed, there is much that your son can do to compensate for having trouble absorbing and remembering what he hears. I have a similar learning disability along with a very bad short term memory, especially for what I hear.
This is how I compensate for it: #1: I write down everything I want to remember. Most of the time, I only need to write down a couple of words so that I can jog my memory. Teach your son how to take notes in school -- they should be teaching the children this anyway, but go ahead and give him a head start. #2 -- I have to get all of my senses into the act when I want to learn, comprehend and remember something. When I am in a situation where I need to learn or remember something, as I'm writing it down, I'm also conscious of how the pen feels in my hand. I'm making sure that I look at what I'm writing, and I also look at the person's face while he or she is talking to me. I get my sense of vision into the act because that helps me remember when it's coupled together with my hearing and my sense of touch. Sometimes I also draw little pictures to help me remember a concept. Again, that brings in my physical sense of touch and my visual learning.
When I write stuff down, I make sure I touch the words with my fingers and feel the paper while I'm looking at it. That means that the words are stimulating all my senses at the same time, and this leaves a more intense impression on the brain. However, just like any other child, your son is going to need repetition in order to remember and learn. I hope this teacher doesn't think she can tell 7-year-olds something one time and have them remember it!!!!!
Another thing -- if the teacher is aware of the fact that she has a student who has trouble learning by hearing, why doesn't she write stuff on the board or supplement her lessons with pictures or other visual aids? It's crazy to expect someone with a learning disability that knocks out the sense of hearing, to depend on hearing alone to grasp what's going on. That's like sending someone who uses a wheelchair to Phys Ed and telling him or her to get up and run. It's not going to happen.
With time and patience, your son can learn to concentrate and focus better on what he hears, and with more learning and knowledge to build upon, his auditory learning will become easier with experience...but he's just a little guy, and he needs more accomodation from the teacher.
I never heard of a first grade teacher who didn't use visual aids to boost understanding of her teaching.
She needs to remember that she must make eye contact frequently with your son while she's giving him directions. She needs to be patient, repeat what she says, and be near him in order for him to stay focused and feel connected with what is going on. Your son should be sitting at the front of the classroom -- it's educational death for a learning disabled person to sit at the back of the room, especially if hearing is the weakest learning sense.
See if you can find out what this teacher actually knows about helping children who have learning issues and disabilities. If she's not doing these things for your son, then she needs to re-think how she's approaching him. His self-esteem might have already started to slip because he feels he can't do stuff, and she needs to be very encouraging and attentive to him.
There is a lot of good information on the internet about learning styles and learning disabilities. Do check it out and make suggestions to the teacher when you talk to her.