Is there a way to file FREE electronic federal tax extension ?

Well, still TurboTax/Intuit allows FREE electronic filing of Federal extension.

Check this link here: TurboTax Easy Extension

For more information:
http://turbotax.intuit.com/support/kb/general-program-issues/tax-essentials/605.html

How to file federal tax extension?

You need to file form 4868 to file extension for Federal Tax Return. Form 4868 is available here:

2008 Form 4868

For more, info check this IRS link.

For state extension: Refer your state tax board as each one has its own rules and policies.

 
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