This seems a [long-standing|http://www.entropy.ch/blog/Mac
OSX/2009/01/27/Mac-OS-X-Problem-Unsolved-for-Years-Terminal-Meta-Key-and-Internati onal-Keyboards.html|Mac OS X Problem Unsolved for Years: Terminal Meta Key and International Keyboards] issue.
A possible solution could be to find how to specify an arbitrary alternate key as the META key, for example the Caps Lock or Fn key.
Another solution could be to tweak the shell to print the requested characters, even with the "use Option as the META key" option enabled. For what I understand, this route for the Bash shell is explained [here|http://anders.janmyr.com/2009/01/making-mac-os-x-terminal-hum.html|Making the Mac OS X Terminal Hum]. However, I don't know enough of *nix and shells to really understand what's written in that article… moreover, I use the tcsh shell and those instructions seems to me very shell-specific.
Any idea of what needs to be tweaked in a tcsh shell environment? 🙂