Could someone recommend a free and/or open source GIS application that can orthorectify map images?
INPE in Brazil (National Institute of Spatial Research) has an software called Marlin used for some raster data processing. It's known Marlin can orthorectify, tough I don't know how to proceed. But it's free.INPE also develops the SPRING software. It a GIS suite that can orthorectify and it's free as well.
But unfortunately, those two softwares are not open-source.
Qgis or Grass or uDIG ... For each of these software look into the plugins and 3rd party plugins as well
Orfeo Toolbox has some tools for orthorectification, mainly for satellite images (using the RPC information), and it is an open source image processing library. It uses on OSSIM. It can be embedded in QGIS, but it has its own GUI (Monteverdi) as well as command line applications.