1) I spoke with Gloria yesterday, she said she'd definitely be open to helping us develop content. You can get her email from me or Jesslyn, I don't want to publish it here.
2) I've looked into material published for special needs students and it's pretty good, but not cheap. These books are called "high-low" or "hi-lo" readers which means high content, low reading level. These books keep the content and book appearance age appropriate, but the reading levels have been lowered to various grade levels. Both fiction and non fiction are available. The idea here is that students struggling with literacy do not need to be embarrassed by reading a "dumb kid's book". Ideally, the books themselves are not identified as such although unfortunately some of them have some kind of hi-lo label on the cover which sort of defeats the hi-lo purpose. Publishers of this type of material include Scholastic and Orca Books. (http://www.orcabook.com/) I realize we can't afford this material, so I'm posting this as a starting point for further research if communities express a need to help students develop literacy skills.