The Baen Free Library has an epub option for nearly all its books. At the Fifth Imperium website, which offers, with permission, images of the various free CDs that Baen distributes with some of their books, only the books in the newer disc images are offered as epub.
As an aside, if you like the Baen Free Library and have never visited Fifth Imperium, I highly recommend it. It offers a lot of free books that aren't available in the Free Library--with Baen's permission, of course.
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