The challenge aspect
The challenge would be to keep to all free and legal materials and learn the language to at least A2 level tested by an agreed upon test, probably dialang and/or DLI. Of course, most languages won't have a reliable test, so, participants should test themselves honestly using the CEFR criteria. I know, I know, how can we be certain? Well, we can't really. We'd just have to trust the participants' honesty.
Challenge Variants
Hard Core- Pure Free and Legal Challenge:
Participants would do a "pure FL challenge" using only online free and legal, non copyright resources. The challenge would be to keep to these materials and not pay for anything. This means online dictionaries; non copyright, online or open-source courses and any combination of these. Examples: FSI/DLI/Peace Corps/Cortina/ERIC courses; Deutsche Welle German Resources; Radio France Internationale (RFI) French learning materials; Language Transfer; French In Action/Destinos- but, without the course books and workbooks if you have to buy them or illegally download them. Librivox or other free and legal audiobooks. Free and legal podcasts- learner-intended or native intended. Free and legal ebooks. Language exchange instead of tutors. Free and legal films/youtube videos, etc. Nothing from the library.
Library Free and Legal Challenge
Again, totally depending on participants honesty here- no illegal downloads... not mutually exclusive with online materials. Any course material freely available from the public library. Any TL book, audio or film available from the library. Participants would have to declare which materials are from the library and use them according to the library's policies. In other words, if they give you a maximum total of time you can borrow a material, then state that and keep to it. Keeping a book for six months and paying the fine- not good.
Super Free and Legal Challenge
The Super FL challenge would be to take the language to B1 either "pure" or "library assisted".
Super-Dooper Free and Legal Challenge
The Super-Dooper FL Challenge would be to take the language to B2 either "pure" or "library assisted".
The "No Way In Hades You Can Do This At All, Yes This Means YOU!, Free and Legal Challenge
Learn the language to C1/C2. I won't even bother putting a time limit here.
The "Irrationally Exuberant" Adult Monolingual Free and Legal Challenge
Do any of the above with two or more languages simultaneously. I will cite your username as the exception to my well known observation about these folks never reaching a high level in any of their languages if you get to B2 in two of them. Oak leaf clusters will be awarded for the successful participants reaching B2 in two or more languages in this challenge. Experienced learners with a language at B2 or above already who want to do this- you're just Irrationally Exuberant

Plus Pre-existing Streaming Service
You can use it, but not in the Pure FLC challenge, the catch being it has to be pre-existing, already in place and not just bought for language-learning, and you have to make full disclosure so that everyone knows.
"The Free and Legal with Swap Exception" (any variant or combination except pure). Inspired by rdearman- see further down. If you can swap something that isn't cash in exchange for materials, resources, people time... but not something that was illegally downloaded at one time or copied- including, xeroxes, homemade dvd's or cd's or ripped mp3's... OK. You can even use italki if you've built up credits teaching others for use on the site, but if you have to fork out cash, forget it. Again, you're on your honor here folks.
Methods:
Any and All! I don't care. SRS your hearts out if you want! Do "All Course All The Time"! Multi-track, single-track, no track, as long as what you do is free and legal.
What Counts?
Oh my! What have I got myself into!?! I can't stand this crap in the Super Challenge discussion. The challenge is with yourself. Be honest. If you think it won't count, you're probably right. A line has to be drawn somewhere. My vision for this challenge is that someone who wants to learn a language can see themselves in the participant. This means that, no, if someone (not a library) lets you borrow, or gives you, their Assimil/Pimsleur/Teach Yourself/Colloquial course... NO you can't use it. Same goes for a TL book, video or audio.
False Beginner
Just how much of a false beginner are you? Let us know. Be honest.
Similar Languages
Use common sense, please. Yes, it's going to be easier to reach A2 or B1 in Portuguese if you already know Spanish, Italian or another Romance language. It's going to be easier to reach A2 or B1 in Dutch if you already know German, Lao if you already know Thai, Ukranian if you already know Russian, etc. Please disclose what languages help you. Disclosure will help others to see your progress with clarity. People know my language background on the forum, so if I learn, say French after Haitian Creole and Lesser Antilles French Creole, it isn't as big a deal as rdearman learning Czech with Free and Legal materials and resources.
Time Limit
Nine months for A2. 15 months for B1. 24 months for B2. Whatever for C1 and C2? (Yeah, right... as if! Ha! No Way! Ain't happenin' dude! Has reading PM's log influenced me? Fry a fry!)
Participation Requirements
Start and keep a log. Contribute to the inevitable discussion thread. Help others by posting your resources and where you found them. Don't cheat, be honest!
The Experiment Aspect
1) I especially like the "pure" challenge variant. Some of us have probably already done this to a large extent, but I doubt if anyone has taken it to the extreme of not buying anything or not illegally downloading copyright material. I think that undertaking this would end up being more than just a gimmick. OK, it's a gimmick, but it would force learners to think "outside the box". We experienced learners have our own methods and favorite resources. What if we couldn't find our favorite translated books for free and legal download? What do you do if you always start out with Assimil, or Pimsleur or Michael Thomas? You'd have to improvise, take what you can get and make the best of it, supplement it. Perhaps, you may have to do something you wouldn't consider when you can have any material you like. Maybe you'll make your own parallel texts. Make your own ebooks with Calibre from Wikipedia or online texts, even blogs. Maybe you'll use a fifty or sixty year old course and figure out how to learn the modern language through exposure. Maybe, just maybe, you'll actually try to make a language exchange work. Maybe we'll get out of our comfort zones.
2) Are the free and legal online materials really good enough to get you to A2?... B1?... B2? Are they so boring to you that you just have to have that Assimil cartoon or you can't do it? I've often said that just because you can do something, it doesn't necessarily mean that you should. Are online dictionaries good enough? Is there enough material to help you learn grammar/pronunciation?
3) Can you really learn a language with materials (including inter-library loan for those of us who don't live in major metropolitan areas) from the public library? Are the library's time limits on borrowing too restrictive to sufficiently and effectively utilize the material? Are any of the umpteen gazillion youtube "courses" helpful or just a load of @#*%? Can you learn German to B1 with Deutsche Welle's courses and the Easy German videos? Can you learn Spanish with FSI/DLI/Destinos? Can you even think about learning Japanese to A2 with free and legal resources only? What about Russian? Is the online Estonian course worth anything more than its (free) price? Is DLI Portuguese and Haitian Basic as good as iguanamon says it is?
4) Can you really use FSI from scratch? Inquiring minds want to know! (Yes, you can)
I think participating in the challenge/experiment for taking a language to A2 (with B1 being "blue sky") would benefit participants by showing them how they can cobble together their own materials for learning and make them better language-learners overall for having had to stay within the parameters of the challenge. There are certainly plenty of courses (not ideal), plenty of native material- written, audio and video, the ability to connect with native-speakers (always "hit or miss"- most often "miss"). If you can do something "the hard way" with limited materials and not ideal resources, when you have your choice and better resources... nothing will stop you.
Why do it? Why not? I'm sure it's crossed a lot of people's minds before- with online dictionaries, native podcasts with transcripts, FSI, DLI, Peace Corps and Cortina courses online, Deutsche Welle's German Resources, free and legal ebooks, google translate, ankidroid, project gutenberg, librivox, even some comic books and films- all free and legal, etc. I think it would be a benefit to the community to show that learning a language to high beginner/low intermediate level can be done for free, without having to illegally download or buy anything.
If it's just me doing this as a challenge/experiment, well, then... "that's just iguanamon." If three or four people are doing the challenge/experiment then it shows that it's replicable and a legitimate way to go about learning a language. It would provide a road map for others to follow, or not, if its just not doable. Anyway, please give me your thoughts. Worthwhile? Legitimate? Too much of a gimmick? I'm open to suggestion and tweaking from those who may be interested... except at the core. It should be free and legal and replicable by anyone with an internet connection and/or a library card.