Chomsky does in fact believe in free markets, but he thinks the state needs to be expanded to meet this end, rather than eliminated or reduced.
In a free market society, people can create a socialist farm, town, or society, if they choose, from the ground up, as opposed to the top down (as a democratic or neo-con president would like to do). That is because it is their choice, as opposed to being forced upon them.
Those who do not choose to participate do not have to. People can make socialist factories and businesses if they want, but they'll have to compete with a traditional factory or business of voluntary heirarchy led by someone who is experienced in leading a business.
In a free society, people are free to do and live as they like.
If that means making a commune, than who are we to say they can't?
A true commune can only exist -and sustain itself- in a free society to begin with. So to criticize the free market, for a socialist or communist, is detrimental. I don't think Chomsky criticizes free markets, so much as what is currently called "the free market" that we see now.
I have hang ups with the abolition of private property, that's a dangerous thing to come from a government. If Chomsky does his homework, as a scholar should, he'll probably consider Ron Paul the way to go tactically speaking, but I'm not Noam so who knows.