The teacher clearly said "letter" though, so phonetics shouldn't come into it. If they were named "Pete," "Psycho Pete" would be reasonable and probably accurate.

Also, xylophone is a noun anyway, so after they redo kindergarten, they'll need to go back to second grade (or maybe first?) and relearn basic grammar.

Finally, English phoenetics is an oxymoron, but I don't think kids get into that concept until later on in school, so I'll give you a pass for now. But everyone knows English pronunciation and spelling aren't related and you just end up memorizing everything anyway.