What about SDE for Visual Studio?
You mention the cost: well this is the downside of Visual Studio. You don't get a lot for free. Resharper costs money. Hell, even Visual SVN costs money (compare that to Java IDEs where it's standard).
The biggest problem I think is that, if I read what you're saying right, you want roundtrip engineering from C# source code? If so, you're going to pay for that. Even in the Java world you pay for that.
I'm not convinced such things actually have all that much value. UML needs to be used selectively to explain key abstractions, concepts and architecture. This is not something a code generator can do. Also for high level class diagrams you rapidly run out of room if you start putting in all the properties and methods.
If you just want to draw some UML diagrams without hte roundtrip engineering I have tried a few of these and JUDE Community was about the best I found of the free ones. I've heard the latest version of ArgoUML doesn't suck either. Just had a quick look and it's certainly a lot better than when I tried it a year or two ago.
So it all comes down to what you're trying to achieve?