Xen *IS* open source... you're free to change how it handles full screen...
stick with Xen i'd say, there's a bigger picture than a fullscreen mode. If that's a real barrier, just don't use that access method. windows domu? use remote desktop. linux domu? use vnc, freenx, xdmcp...
but using a physical drive is very bad practise... what are you trying to achieve with that? if you want a common file share, try using a network connection internally to access the host filesystem or some such.
if you actually do mean open source, then see how KVM can do it. if you actually mean "free" then VMware Server is also available for no pennies.