Evaluation of dyslexia

There was recently a discussion on the NASP message boards regarding the evaluation of dyslexia and whether or not we should be involved with this, as School Psychologists. I think we should for two reasons: 1) Under the federal definition of an SLD dylsexia is listed, and 2) A lot of research shows that dyslexia is the result of a core deficit in phonological processing (e.g. sound-symbol correspondence, sound blending, etc) which we can assess on cognitive and achievement batteries. In my district, I had a reading teacher tell me once that we can't "diagnose" dyslexia because it is a "medical diagnosis" which seems strange to me What do you think? How do you do it in your district?