I can think of three options:
Implement RFC 2217
RFC 2217 covers a com port to TCP/IP standard that allows a client on one system to emulate a serial port to the local programs, while transparently sending and receiving data and control signals to a server on another system which actually has the serial port. Here's a high-level overview.
What you would do is find or implement a client com port driver that would implement the client side of the system on your PC - appearing to be a real serial port but in reality shuttling everything to a server. You might be able to get this driver for free from Digi, Lantronix, etc in support of their real standalone serial port servers.
You would then implement the server side of the connection locally in another program - allowing the client to connect and issuing the data and control commands as needed.
It's probably non trivial, but the RFC is out there, and you might be able to find an open source project that implements one or both sides of the connection.
Modify the linux serial port driver
Alternately, the serial port driver source for Linux is readily available. Take that, gut the hardware control pieces, and have that one driver run two /dev/ttySx ports, as a simple loopback. Then connect your real program to the ttyS2 and your simulator to the other ttySx.
Use two USB<-->Serial cables in a loopback
But the easiest thing to do right now? Spend $40 on two serial port USB devices, wire them together (null modem) and actually have two real serial ports - one for the program you're testing, one for your simulator.