Stumbled across this program called Paint Dot Net that is offered FOC by the Washing State University. It supports Layers and has most of the tools I normally use on Photoshop for retouching and manipulation. There is also a forum dedicated for this software but it was down today. The main page has a link to discussions on plugings but since the forum page is down I was not able to find out if the plugin is the same as PS. Will check later to find out if there is anyway to support RAW files.
Taken from the main download page:
Paint.NET is image and photo manipulation software designed to be used on computers that run Windows 2000, XP, Vista, or Server 2003. It supports layers, unlimited undo, special effects, and a wide variety of useful and powerful tools.
It started development at Washington State University as an undergraduate senior design project mentored by Microsoft, and is currently being maintained by some of the alumni that originally worked on it. Originally intended as a free replacement for the MS Paint software that comes with Windows, it has grown into a powerful yet simple tool for photo and image editing. The programming language used to create Paint.NET is C#, with a small amount of C++ for setup and shell-integration related functionality.