J.,
Have you had your daughter tested for dyslexia? My husband has this and he has to re-learn how to accomplish tasks and procedures almost every day at work.
Things like brushing his teeth, morning routine, etc. are he accomplishes without problems because he has done the process for so long it has become habit, but if I move a set of baking dishes to a new place in the kitchen, then he can't find where to put anything in the kitchen for a few months.
Dyslexia comes in many different types of forms and once she is diagnosed there are teaching techniques you can use to help her succeed at reading and comprehension.
One other idea, your daughter may not be ready to read just yet. Many home-schooled children don't start reading until they are 8 or 9 years old, but once they start they learn very quickly. Try dropping her reading level, have her choose books she enjoys, read with her daily and have her read with you, and see what happens. Sometimes learning in a safe environment where there isn't any pressure to get the word right helps the child to retain the word better.
Good luck!
-C..