Reminded me of an early Priest
Cherie Priest's Toll does not strictly involve the Three Billy Goats Gruff and a troll but it could.
The novel details a small town in a swamp that has a problem with people going missing. Two old ladies may know the secret, or they may not.
What makes the novel work is the atmosphere which propels the story forward. The story is pretty straight forward, but the book does leave the possibility open for more stories set in the same place. (I want more about the doll house to be honest).
