A Snarkling sends a link:
If you haven't already seen this, you might find it entertaining: Free Rewrites
Interesting story. You'll notice he did NOT have an agent when he was doing the rewriting. I'm not sure of the specifics of course, and I don't work in kid lit, but no one is doing massive rewrites without a contract here. I've never actually had an editor jerk a client around like that. It doesn't make much sense for an editor to spend his/her time on a project they aren't serious about.
I have had editors who've suggested massive changes. I sold the books to someone else.