Have you read them any Beatrix Potter? I know Peter Rabbit comes to mind (which is also a good story) but many of her books are a bit complicated and have interesting themes. Mr. Tod, for instance, is quite long and involves trickery and just a bit of nastiness. I see some of her longer books as a halfway point between picture and chapter books. My almost four year old is always up for one of the Potter books.
I run the Frontier Wholesale co-op in February, May, August & November