I have been using Lugol's for about 6-months now WITHOUT any negative side affects. That being said, I did go through some nasty detoxing affects in the first few weeks. I had some weird skin rash completely localized on my neck, just a small area. It was the toxins coming out of me according to my doc. I has some increased sweating as well. All of this has stopped now.
I take 8-10 drops a day, I mix it with my coffee in the morning and drink it as normal.
The cheapest place I have found to get it is Piping Rock