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roadknight, you couldn't have read many. Squeak and Logo have been mentioned several times.
So was LambdaMOO. And lots of other good suggestions...
Mathematica would be another possibility, if only it were free - an ideal teaching language which could cover the needs of several parts of a school curriculum. The notebook presentation format is a perfect medium for introducing the concept of computer-created graphics, sound and animation.
Come to think of it I'm surprised Wolfram Research isn't already in the K-12 space.