Thanks to Jen Farr and her website Farr-Out Links to Learning, I learned this morning about a site called Big Universe. It is a site on which you can read, create and share children's books! Of course, there are several different versions. Free, Personal, Family, Classroom, and School. Prices range from free (my personal favorite!) to $90 a year per classroom.
From what I can tell about the free version, you can read portions of the professionally published children's literature and all of the books written by folks like you and me. (Certainly enough from which to pull writing strategies.) You can publish and share online books, but you aren't able to use the animated characters. It reminds me of a pumped-up, online version of Kidspiration or the Writing portion of Successmaker Reading. Take a look to see if you think it would be something your students would enjoy and be motivated by.