First, my condolences. I can't imagine what it is to deal with losing a parent. I think about it often because my parents are getting up there in age. I try to resolve myself that it will eventually happen as if that will help me deal, but I don't know how anyone can prepare for that. Hang in there.
A friend of mine got a book for her daughter that helped explain death. I believe her daughter was about the same age. I tried to get in touch with her to see if I could find the title of it for you, but she didn't answer her phone. She just had another baby so I'm sure her schedule isn't set quite right yet... :)
I did find you this link from Amazon.com: http://www.amazon.com/s/ref=sr_ex_n_2/002-###-###-####-##...
If you look on the left edge of this page there is a category listing of the books they have. One of them is "Issues" and they do have something for "Pet Death" but I didn't see anything for family death. But maybe you can check it out and get some ideas.
I'm thinking, too, that due to her age, you more than likely won't need an in-depth answer. Sometimes as parents we think the answers we give our kids have to be all serious with headings and footnotes and bullet points and everything but more often than not they don't need all that. Maybe the books they list on that site can give you some simple ideas to share with her.
A few years ago I lost my 2 year old nephew to brain cancer. He was from VA but came up here to Boston because the Children's Hospital up here is world-renowned for helping children with cancer, so my daughter was in contact with him and took her to the hospital to visit him every so often, too. She was almost four when he passed away. Now she's seven. As time has gone on, she's forgotten him, which is sad to me, but by the same token, I'm not sure what it would do her any good to remember him. God that sounded awful...*sigh*. I say all that to say reiterate that you might not need a huge, indepth approach. Okay, I'm rambling...
I'd think that being as positive as possible (even about this completely negative, sad situation) is the best way because you don't want her to worry about whenever you get sick that you might die, ya know? I'd also think it would be good to see if you can help her to express her feelings. There is a book on feelings that my daughter loved (she's 7 now). Hold on lemme see if I can find that...
One of them is "Alexander and the No Good Very Bad Day"; here's the link: http://www.amazon.com/Alexander-Terrible-Horrible-Good-Ve.... I used this book when I talked to my daughter about her brother's temper tantrums. She was little and he (her father's son who lived with us for a short time) was having some...disciplinary issues, shall we say. It was important to me that she understand that his behavior was not acceptable and she shouldn't ever try it. It was a little difficult for her at first to express herself, but we kept at it and she finally got to a point where she could express how she was feeling. So, after allllllllllll that, I'm wondering if books like that can help you help your daughter to express whatever she's thinking or feeling.
I'd keep pictures up, encourage her to draw pictures of her and her grandfather...whatever will help her express herself. But also don't be surprised if she just accepts it and moves on, ya know?
Okay I'm gonna shuddup now. I've rambled on enough! Oh wait one more thing! We as moms, especially us single moms, are so quick to take care of everyone else, especially our kids. If you remember nothing else I typed here, please remember this: YOU HAVE TO TAKE CARE OF YOU FIRST IN ORDER TO PROPERLY TAKE CARE OF HER. This is the time to lean on friends and family for support to make sure you mourn and heal properly, too, okay?
*Hugs*...hang in there.
R.