Children’s Bible Stories?

A year ago, a little girl told my (non-church-going) niece that she was going to Hell because she didn’t know a particular Bible story. This has all worked itself out in the meantime, with the two little girls each coming to a broader understanding of the world, and becoming friends. But one lingering effect of the initial trauma has been my niece’s conviction that in order to understand certain people, she is going to need to know about the Bible.
I would know just how to proceed if she were 14. But from what I have been able to see, the quality of younger children’s Bible story books is, at best, inadequate. Story lines are altered to suit rhyming schemes, works righteousness abounds, God is everywhere “He,” and the single thrust of most every story is that it is our bounden duty to tell everyone that Christ died to save them from damnation – even if the story is from the Old Testament. (See, for instance, Arch Books’ Zerubbabel Rebuilds the Temple.)
This may be an evangelical strategy, but it seems doomed to be an evangelistically ineffective one – families who are not churchgoers are going to be so turned off by these stories that they wash their hands of the Bible entirely and move on to Old Turtle. And so I had been fantasizing about writing my own series of children’s picture books from the Bible – that this might not be another lost opportunity to introduce children to Christianity.
It is a popular argument that the Bible is not particularly kid friendly. The stories we tell to children from the Old Testament are almost comically grim: the expulsion from the Garden, David killing and decapitating Goliath, Jonah swallowed by a giant fish, Ananias and Sapphira struck dead for lying… “Noah’s Ark” is a great example of this – not in reality a story mainly about a bunch of animals living peaceably together on a dear little wooden ship, but unavoidably a story about the death of all humanity except for 8 people (and all of the arguably blameless animals but two (or 7) of each species) at the hands of an angry God.

But even this is nothing compared to the stories we dare not tell children – Tamara raped by her brother, Jezebel torn apart by dogs… so I have begun to agree that perhaps the Bible really is not a book for children. My niece is right to think that the Bible is an essential book, but perhaps wrong to consider that she therefore needs to know all about it right now, as a second-grader. I hope that one day she reads Crime and Punishment, too, but by “one day” I mean “when she is sixteen or older” – and again every five to ten years. I am not in the meantime frantically scouring bookstores for the storybook version.
The Bible is a diverse collection of texts, so naturally there are passages which I would except from my “this is no book for children” dictum – but most of them are not the narratives. For instance, I recently came across a beautiful rendering of Ecclesiastes 3:1-8 for children (To Everything There is a Season, by Jude Daly.) Certain Psalms would lend themselves to this sort of treatment, certain sayings of Jesus and passages from Paul and Isaiah.

But on the whole it seems that we are more in need of Tolkien-esque authors – writers who can write stories that illustrate the themes and truths of Christianity in new settings – settings that do not necessarily invoke Christ, but rather evoke Christianity.
What do you think? Are Biblical narratives suitable for children? What are some of your recommendations for books for readers under 10? Not only Bible stories, but also those books which point towards the insights of the Christian faith?