I’d look into qTranslate. I haven’t ever used it, but it’s the only free alternative to WPML that I’ve ever seen.
That being said, I’d suggest you just pony up the $30-80 for WPML. It’s by far the best-maintained and cleanest multilingual plugin you can get and it’s absolutely dirt cheap, considering what you get. And with their (very reasonable) pricing structure, what you’re really paying for is DEDICATED SUPPORT. That’s a pretty big deal in the open source world.
Also, you’re not looking for an open source replacement, you’re looking for a free replacement. WPML is GPL licensed, so it’s definitely open source.