What's "too dark" for kids?

I think you have three different questions here.

1) What is too dark for kids under 12?
the answer to that is...not much. Depending on how you handle it, you can write about some pretty grisly stuff. Gaiman's Graveyard Book opens with a mass murder, after all.

2) What is too dark for the Christian kids' market?
That may be much more restricted, given that most of the calls for censorship in school libraries come from fundamentalist families. I don't know the answer, but I would guess that the standards are different than for mass-market books.

3) What's too dark for the story I'm writing?
What I've read of your book so far is definitely more suitable for younger kids. A sudden shift to something grim and intense would be difficult if the rest of the book doesn't prepare the reader for that possibility.

The only way to really find the answer to your questions is to go to your local Christian bookstores, buy a whole bunch of children's books, and readreadread. You'll have a much better sense of what is acceptable once you've read enough of what has been published recently.

Read a lot of kids books! Particularly The Graveyard Book (a baby's parents are murdered and he goes to live in the graveyard where he is raised by ghosts), and maybe Heck: Where The Bad Kids Go, and some kiddie horror. Your chapter doesn't sound very scary the way you describe it, but then again it's all in the way it's handled, the tone and such.

A couple of recent threads on this very subject that may be worth checking out:

Here and here.

Just curious--are you writing specifically for the Catholic market? If not, some editors may have a problem with the concept. I think if it were my manuscript, I wouldn't specifically label the place as "Purgatory."

Let me restate that--it's not so much that editors would have a problem with the concept. It's that many editors would feel that bringing in a religious idea that parents of a different religious tradition might find objectionable would limit sales, stir up controversy, and might get the book banned in certain places. While controversy spurs sales for adult books, children's editors often don't like to deal with this kind of thing.

I once had a ms. on an edgy topic involving religion and several editors turned it down because "it wouldn't sell in the South." (I did eventually sell the ms., but not to a mainstream publisher.)

Ok I'm not from America, but would it really be that big a deal with the idea of angels alienating certain parts? From how you describe the chapter, it sounds fairly normal and what kids would probably want. I think as long as it's not something totally depraved or has foul language, most kids are cool with it...

There's a book called The Brothers Lionheart by Astrid Lindgren which deals with two young boys killed in a fire who must combat evil forces in the afterlife. The Narnia books are another recommended source.

There's a blog called Kinderscares that reviews & discusses scary books/ horror for kids. Not sure if that's what you're after but it might be a good resource.

http://www.kinderscares.com/