I recently purchased a 1/4 cow from a local Chicagoland farm, and it's costing 3.15/lb hanging weight. This should come out to between 5-6 dollars a pound. But of course this includes your higher priced cuts like Fillets and Roasts, as well as 40-50 lbs of ground beef. Since the higher priced cuts usually cost you between 10-20/lb for grass-fed, I definitely feel like it's the only way to go if you can afford the up front costs.
We found a local farmer through word of mouth and only ended up paying $3.15/lb for the entire cow. I think the craigslist idea was great. Also, there might be local organizations for very small producers that can point you to someone willing to sell to you at a reduced rate.