What about a wine rack?
Good luck on your remodeling!

Could you post a few more pictures to the left of the fridge and range? This image above works because of the variation in height between the wine rack and cabinet. While I like this idea, I think I will end up look a bit clunky if you fill in the full space with a rack. I'm getting the feeling that removing the upper cabinet boxes and centering open shelving (per your suggestion) on the wall will be the easiest/most cost effective.

Check with your local building supply company or a good kitchen contractor. The original cabinets and doors can most likely be cut down to fit the reduced height and be rehung above the refrigerator. My friends just did that very thing in their kitchen and it worked out beautifully.

I was going to suggest the wine rack too, good thinking Granite Grannies! I think it's the perfect spot for one and it would look great, while keeping cost down to update that area.

Good luck!

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Maybe a "garage" for appliances you don't use very often (don't forget the climbing to reach it all). Don't know if you use holiday dishes or some speciality serving platters you don't use very often either. A shorter cabinet of sorts would probably be your best bet. I had the same exact situation when I re-faced my cabinets, so I just use that cabinet for infrequent used stuff like my deep fryer and some very delicate champagne glasses.

Was the cabinet the length of the one on the left of the fridge? If so, you could cut the cabinet off about (looks like) 1-2" and slide the fridge back under it. It works great and looks like the fridge is built in.

Shelf with cookbooks
http://houzz.com/photos/717845