i've searched a bit for open source mugen stuff, but it seems to me that there's not much around really working. maybe if you find a working mugen software incl. source. i love fighting games, so, i would give it a try
Have you tried Open Source Mugen 1.0? Just asking because I haven't tried it so I don't know how stable it is. I will do some searching and see if there is another open source mugen out there.