I like yuor interpretation of the academy. It makes more sense to me. I always thought the fact that such a powerful group happens to all be in one class can't be an accident.
Is that Kabuto at the end there? I wonder what you're going to do with him. I hope Aiko doesn't magically convert him to the side of good- she doesn't have therapy-no-jutsu, right? because I might have to stop reading, and that would be a shame because this looks really good so far.

Like your thoughts on the Sarutobi. Love the story.

Very good story. I like Aiko so far. She should be somewhat prodigious, since she was an adult in the real world, and she doesn't seem like a Mary Sue.

Good luck with the challenge.