Is it possible that being with you so little he is not comfortable and just doesn't show what he does know? I find it odd that you find him so behind but the parents find him "exceptionally advanced" could he just be to uncomfortable to 'perform' in your daycare? I know often children can be behind without the parents knowing it...but to think he is advanced and not just "normal" seems weird.

Document your observations. You can ask parents questions about what the child knows at home (numbers, colours etc). You cannot force parents to see that a child is developmentally delayed. If they are in denial they just have to come out of it when they are ready. Forcing it usually just makes the denial worse.

Maybe they speak another language at home and he isn't strong enough in english but is fine in his primary language?