OS X Terminal: Meta key + alt functionality at the same time

Question

Is there a way to use an alt / option key as a meta key but still be able to use it to make some characters which need it?

For example, in my l

Answer 1

This is years late, but for people coming across this page whilst searching for a solution, as I did, I have decided to build one myself, one that doesn't require abandoning Terminal.app in favour of iTerm 2.

It is a simple status bar app that runs in the background and rewrites all left-Alt + $KEY key events to two key events in rapid succession, Esc, then $KEY; however, it only does this if Terminal.app is the focused application.

You can find it here at https://github.com/habibalamin/Metalt.