I'm using Mal's
www.mals-e.com which is free and works with paypal, but doesn't offer the out-of-stock feature you're looking for. I found it a little difficult to figure out at first, but once I 'got it' it's easy to use.
I think what you want is an inventory feature. Yahoo shopping had that when I used to have a store there, I could tell it that there was one, or five, or 20 of an item in stock and it would know when I was sold out and mark items accordingly.
I LOVED using Yahoo! store for many reasons and recommend it highly.