Yesterday Emilio Butragueño had a internet chat with the Marca readers Nanny, and he talked highly about Alonso, saying it's a pleasure to watch him play, etc, etc, etc. But he ended up with, "I don't know if he'll be here next year, though".
Emilio Butragueño, as much as he's an icon of an archenemy club of mine, is a man I respected in the pitch, and I respect him out of it. Official sources of Real Madrid like him, talk about the negotiations being very difficult.
So Marca are echoing the Times and other English press, who apparently (I doubt it) have more info than Marca and the Spanish press. So far the only ones seeing the deal as done are the English press Nanny.
The point you and another mate made about Diarra is a valid one: no one gives their players for free, and I hope Rafa is being tough in the negotiations, either they pay a ridiculous price or Xabi stays.