Well, I'd allow students the option to take the final exam once per semester at any time. Those that pass at 90% would be transferred to a mixed-grade same-subject classroom for that period where they could study at their own pace.

I'd start with Khan Academy math, since they've got pretty good tools for supervising students learning at different rates, and the math track is pretty thorough for someone in K-12.

Since the students are self-selected, I wouldn't expect significant discipline problems, and since each mixed-grade classroom focuses on a specific subject there exists the possibility for easier collaboration.

I think this model would stand a greater chance of success in middle- or high schools where students have a class schedule. I don't think it would be practical in very small schools; however, I would expect that very small schools already have their own ways of handling students learning at different rates for budgeting reasons.