Tuareg II (Tu2) is nearly free.
It's a drum machine program and .WAV file sequencer with built in effects. There is also a synthesizer and piano roll editor. The program can work with both loops and single drum notes. There is a built in loop editor too for cutting up your rhythms.
A similar program from the same website is TunaFish. TunaFish can load up VST effects and VST instruments. It is similar to Tu2 but perhaps more advanced. It can import MIDI files also. TunaFish has saving disabled until you register, but you can still render the ouput to .WAV file.