The Morpheus Preview Edition certainly is open source. By using the Gnucleus source, they are bound by the GNU Public License to make it open source. While the Morpheus code may not be available for download on their site (they're not obliged to post it for download), they must provide it to you if requested to do so. Besides, at one point, they actually DID post the code for download... I have a copy of it msyelf.

As for the inclusion of spyware, there's nothing saying that the program is no longer open source just because it includes spyware.