I've thought about ePub books a number of times. I don't think they'd help you get noticed (I really could be wrong) but making one is essentially free so other than the time you spend re-formatting, you won't loose anything. I just haven't been able to get the time. I also don't think that ePub would handle a lot of pictures well, It doesn't seem designed for that. There are some kids books on ePub but they have a relatively low page count.
At this point though, what is the advantage of an ePub over a PDF? To my knowledge it has better DRM and is possibly more optimized for eReaders than a PDF is. I've tried to find an eReader that will do a good job of displaying PDFs and so far the answer I get over and over again is an iPad (which is more expensive and doesn't have an e-ink display).
Would publishing specifically for Kindle put you in a niche that is less crowded? Maybe but I think that DriveThru would be all over that if they thought it was a viable market. Still they may be looking at a market with a limited potential (say 4,000 downloads) and any of us would be ecstatic over that.
Apparently Lulu e-books have some kind of DRM associated with them as evidenced by There are also some mentions of calibre in the comments and that it inserts random strings of numbers (might be a special character not getting read properly in the conversion).
You could try but it has a file size limit of 30 megs.