Are the rules for an exempt employee working for a school Distict different? I have been told by the District I work for that they are.

Maybe. The rules are different for governmental employers and schools may (or may not) be governmental in nature. Also, teachers are one of the few groups of employees who generally can legally be paid as Exempt Hourly (along with doctors, lawyers and certain computer professionals).

What rules are you asking about specifically?

This school District has a Child Care program on each of the school sites. Directors are hired through the school district processand get paid through LA county but the child care is a separate entity. Director are salaried exempt. We recently received a document that states that we must work 8 hrs and we could use 1 hr on top of lunch time when preapproved for Doctors appt ect. If we use more than that they said they will use our PTO time. I thought they could only deduct 4 hr increments.

Nope. Such a policy is legal whether you work for a school system or not.

"Exempt" is a function of federal law (FLSA) and the handling of vacation/PTO is a function of state law (if any) and company policy. Federal DOL is very clear that vacation/PTO handling is not their issue, and that there is no action soley impacting vacation/PTO which by itself will adversely affect the Exempt status. People sometimes try to claim that the FLSA restrictions on the docking of an Exempt Salaried employees salary somehow prevents the reduction of vacation/PTO balances. It does not.
http://www.dol.gov/esa/whd/opinion/FLSA/2005/2005_01_07_7_FLSA_PaidTimeOff.pdf

Past that, California vacation rules have always been a little strange, more so since the 2005 Conley decision. CA has an Enforcement Manual which basically have the vacation rules as seen by CA-DLSE. This manual was updated in 2006, supposedly in response to Conley. The problem is parts of the manual were updated, parts were not, and we now have some arguably conflicting rules regarding benefit hour handling. Worse, if you actually read the Conley decision, it does not seem to say what CA-DLSE seems to think it says. The nice thing about the current manual is you generally find a vacation rule somewhere in there that supports pretty much position you have. The bad thing is so can your employees.
http://www.dir.ca.gov/dlse/Manual-Instructions.htm