Oh, books! I am a philology student, so you can trust me.
First 2 epics.
1) Gilgamesh
This is a fairly short epic, but a great storyline nontheless. It's reaching psychological depth which has never been there in other epics. It presents the anti-hero Gilgamesh, a tyrann king of Uruk, who befriended himself with the deus ex machina Endiku (with implied homosexuality) and screws with the gods. And we relive the passion of this great king as he tries to find the cure for immortality. The version of Stephen Mitchell is the best so far.
2) Book of Kings: Shahname
This is the biggest epic in world history. It's even thrice as big as Homer's epics altogether and as beatiful as any love novel. It tells of the heroes and kings of the mythological Persia and how they dealt with a world full of Turks and Deamons. It's pure awesomenes. If you are a Lord of the Ring fan, it plays in the same setting, only with more manliesness than just being manly. The only problem is that today releases tend to shorten the epic due ideological reasons. Dick Davis' version (the most complete so far) was shortening the introduction and other stuff to be able to justify that the poet Firdowsi was a muslim. Though the epic points out that he wasn't at all.
Now, modern works.
1.)Faust I
The great drama by Goethe is of a retell of the Alchemist Faust who made a bet with the devil Mephisto that he will give his soul in return to reach eternal happiness. It's a great work of poetry, and there are alot of good translations out there.
2.) Kafka: der Proceß
A fragmented novel of Kafka, where the protagonist K. gets arrested and put on trial. It's a sureal and modern-depressive work of art, which puts you into a world where no escape is possible.
3.) Peter S. Beagle: The Last Unicorn
The very bestest best fantasy novel ever! If you ever watched the movie, get the damn book, it's even better! Trust me, so much poetry in a modern book is rare.
I recommend you to buy it over Beagle's personal shop, since he won't get any money by buying it on normal stores:
http://www.conlanpress.com/
His 52/50 project is also worth to check out.
4)Winnie the Pooh & Momo
My favourite series when I was a child. Seriously, the books were still the best.
5.) The Parfum by Patrick Süßkind
The Scott Pilgrim of Literature. If you want to know what smelling causes to associate, this book is good for this.
6.)Bert Brecht's dramas
Brecht is the modern Goethe of the 21th century. He made alot of stuff, but his best are still his theatre plays.
They are a critic of capitalism and show how human nature can't reach freedom by full product consumption. It's not much of a communist manifest, but more of a critic at Brecht's time.
I recommend you the dramas mostly because of the music. The Fall of Mahagony and the Three Penny Opera are most worth it:
http://www.youtube.com/watch?v=OcmMmHQU8cg 7) Döblin: Berlin Alexanderplatz
One of the many great novels of the Weimar Republic. It's a syncretic work of so many literature styles and motives which almost feels like reading a movie. Great use of montage
8) Gottfried Benn: Morgue poems
Very nasty poems, portraying the corpes in Morgues. READ IT!
9) Thomas Mann: The Magic Mountain
A monumental work of Thomas Mann, whose other works are really recommending. It tells about an ideological washed dude who goes to the Magic Mountain to cross with the best intellectuals and philosophers. A great novel.
German literature is one of the many areas you can get so many good books. I might urge you to look deeper into this.