S.D.
This is a rough one but you are right. You need to set the ground work for his inderstanding of death.
First question that I have is when he wants you to let her in does he "know" that she is out there? He could be a sensitive and that makes what you say all thew more important.
I would think that being truthful is the best. If it were me I would tell him that this earth is a place where we come to visit and have friends, pets and family but we all stay only for awhile. Then we go back to the home that we left so that we could visit here. When we leave it does not mean that we are parted from friends and family forever because we still love them. When they go back home we will all be together again.
Tell him that Buzzy is with (a loved one who has gone on that loved animals). This person is taking care of him/her intil he can go take care of her.
This is pretty heavy for a 3 yr old but he needs to begin to have a friendly idea of the afterlife. He needs to know that death is only a "until we meet again". Just answer his questions w/ love and on the level that he can understand.
Best of luck!!
S.