Cyclocide, the chief moderator here, has been blocking such ads on this site. Just PM Cyclocide with the site address and he can block their ads..

Can't LimeWire at least ask Google to block those sites that are misleadingly using LW's open source, or else ask those sites to clearly indicate where LW is freely available?

You may not be able to block those sites, but surely you can ask them to be clear in their use of LW's name and logo.