NCAA eligibility has absolutely nothing to do with whether or not Dallas public schools accept transfer credit from a private school accredited by the state of Florida, which is what the local news story was about (and for what it's worth, the credits eventually were accepted and he has graduated).
To answer your question, cheno (so why is he ineligible?)... he's not. Not yet, anyway. His case is still under review. And like sys said, no one knows exactly what the issue is or when it will be resolved. There are a lot of possibilities, but if it was a simple GPA/ACT issue it wouldn't take this long, so I suspect those are both fine.
The NCAA either got his paperwork too late to process (which wouldn't surprise me considering he went to several schools, and they all seem to be a mess), or they are checking into the individual core classes he took to make sure they meet their standards. It's not a situation where he'd have to go to a prep school for a semester to improve anything. I think he'll just have to wait on the decision. I think the NCAA has a rule about needing to get all core credits done within eight semesters, anyway, so all he could improve would be his ACT.
For what it's worth, Mizzou signed a football recruit (Chris Freeman) in the 2009 class, but he never made it here for apparent academic reasons. He spent a semester at a prep school that ended up going under and didn't really do much of anything to improve his grades. A year later he shows up out of nowhere after being cleared by the NCAA... who just hadn't had all the paperwork they needed. His grades/test scores were high enough. It was just a paperwork issue.
I suspect it comes down to whether or not the NCAA is going to accept the credits he received in Miami. The state of Florida recognizes it as a legit school. Dallas public schools do not, but will allow students to recover the credit by taking a test. Frank Martin seemed to think the school was legit (pretty sure ksu was behind his initial placement there when he was a ksu commit; Martin is a Miami guy). If Mitchell really does have a qualifying ACT score, did pass legit tests for credit in the classes he took in Miami and does have an acceptable GPA in his other core classes, I see no reason why he should be declared ineligible. But we'll see what the NCAA chooses to do.