LA buyoff?
What is worth level adjustment at lower levels is rarely worth it at higher levels. 3.5e dealt with this via level adjustment buy off - effectively the player would have to take a level over again at (if I recall correctly) 4th, 8th, and 12th level to remove 3 levels of level adjustment. Thus upon achieving 4th level, they do not gain a level and instead have their xp for that level removed and their LA reduced by 1. If they only have LA +1, they are now LA +0. If they have LA +2, they now have LA +1. This affects the level used to determine how much xp they get per encounter, among other things. Recall, however, that in many cases the developers purposefully added an additional level of LA to races they wanted to discourage. So for the pixie, for example, you could remove 1 level of LA (making it LA +3, IIRC) and it would still be a fair balance with the rest of the party. Otherwise the player will fall further and further behind the rest of the party over time.
Another idea is a gradation of traits over more than one level. This is what occurs in AU: the fey like race at first cannot fly, but as I recall has a level where it gains gliding, then another level where it gains true flight. In this case, the player might start out with, say, slow fall (any distance (due to wings)), Dex +4, Str -4, Con -2. Upon the next level they gain gliding, and their Con penalty vanishes. A third level brings flight and a slight decrease to the Str penalty (to -2). Perhaps a further level could bring better maneuverability in flight and either a final lose of Str penalty?
That would have used up four levels as racial levels while gradually gaining both good flight and a loss of the Con and Str penalty. Not sure about the balance of this suggestion, but I think it comes close. Losing four levels in a class will put them notably behind while also granting notable advantages in flight and a Dex bonus as well as the other benefits of tiny size. On the other hand, the Pixie and Doppleganger are LA +4 and grant some SU abilities as well. Perhaps it should be spread over 3 levels instead?
In any case, do these ideas help out any?