I can't come up with any books we may have read off the top of my head, but if I think of any, I will PM you.
When my kids were 3-5 I just made it super simple and tried to give them open ended options so they could create their own frame of reference. For example a conversation might have gone like this:
A comment from E: "I don't think what Grandma said about Angels is true."
Me: Why? Because you have never thought about it, or because it doesn't 'feel right' to you, or because you know something different?
Or, in my son's case: "I really think Grandma is right about Angels!"
Me: Why? Because you feel the same way? Because you have seen/heard/read about what grandma is talking about?
I also asked them to rephrase what they had heard someone say in their own words a lot of the time. In their little brains, I think it helped them sort it out.
Hope this helps! We have always been super open about it all...and my extended family knew we were so it helped that I didn't have to wait until we left the company of others to have the 'real' conversation if my kids were thinking about things out load with extended family around.
On a side note (and in agreement with what herenow said) my daughter at 3.5 was told by a preschool classmate and her mother about a reading in the bible where the firstborn children are all killed and their blood left on the doors (sorry if I am butchering the actual story!) On top of the fact that this family had no right to tell my daughter anything without my permission, E thought she was in imminent danger and kept asking me if I would love her after she died. She literally thought she was going to be killed by someone for over a week...and was filled with anxiety and despair. I FINALLY figured out what was going on and we straightened it out...but making certain what was said is definitely important!
