Years and years ago I created a code base called MirageMUD. It was terribly written, and laggy as hell when another player logged in.
Now, I have recreated this source code, and I've released the entire source code in VB6 on SourceForge. It works great with several players, has password encryption and is ready to go right off the bat. Create your own online interactive fiction, or hack n slash games with MirageMUD.
No but you can run the server on your local machine :)
I am tempted to remake this in C# with a proper editing suite though, so you can create your game without programming.