Intrade, the prediction market website, has shutdown.  According to their website:

With sincere regret we must inform you that due to circumstances recently discovered we must immediately cease trading activity on www.intrade.com.

These circumstances require immediate further investigation, and may include financial irregularities which in accordance with Irish law oblige the directors to take the following actions:

• Cease exchange trading on the website immediately.
• Settle all open positions and calculate the settled account value of all Member accounts immediately.
• Cease all banking transactions for all existing Company accounts immediately.

During the upcoming weeks, we will investigate these circumstances further and determine the necessary course of action.

Here's a link to an article on the slashdot website with more information about it:

http://slashdot.org/topic/bi/intrade-shuts-down-under-murky-circumstances/

Has anyone looked into the feasibility of creating an open source version of something similar, using a distributed application and a microcurrency (such as bitcoin), that couldn't be shutdown?

I'm not sure if anyone has been following the appeal...

but I'm willing to bet up to several hundred dollars at even odds that Amanda Knox will be released on appeal.