Scratch

You may want to see this thread, which is talking about networking Scratch:

http://scratch.mit.edu/forums/viewtopic.php?id=351

And this page by one of the Scratch dev team about this idea here:

http://web.media.mit.edu/~tstern/netscratch/

As far as what language Scratch is written in, it is written in Squeak, which can be found here:

http://www.squeak.org/

Source code for this is not yet available to us mere mortals at the moment, although it is eventually promised and something that supposedly the federal grant Scratch is being funded under said would eventually happen.  The current license for distribution of the Scratch software is under the "MIT license". If that will change, I hope somebody in the know will respond here.

This is an interesting enough project that I wouldn't mind trying my hand at making some Squeak extentions myself such as what you are talking about here.  Understandably though the initial versions of Scratch are being developed by a small team that is trying to establish a vision for the direction of the project, and to keep the focus on kids and simple multi-media software projects.