There are no examples with $M$ finitely generated. We first reduce to the case that $M$ is local. Suppose that $M^{\otimes n}$ is torsion-free for all $n$. Then any localization of $M^{\otimes n}$ is torsion-free. (See, for example, Exercise 14.5.I in Ravi's notes. I had a nagging suspicion that there was a noetherian hypothesis needed for this, but Ravi is pretty careful about that and he doesn't give one.) So, if we have proved the local case, then we know that every $M_{\mathfrak{p}}$ is flat. Flatness can be checked locally; see Ravi's proposition 25.2.3.

$\def\mm{\mathfrak{m}}$ So we now assume that $R$ is local, with $\mm$ the maximal ideal and $k = R/\mm$. Suppose that $M$ is *not* flat. Let $V = M \otimes k$ and let $n = \dim_k V$. We will show that $M^{\otimes n}$ has torsion.

**Proof:** Let $f_i$ be a basis of $V$ and let $e_i$ in $M$ be a preimage of $f_i$. By Nakayama's lemma, the map $R^{\oplus n} \to M$ sending $(x_1, \ldots, x_n)$ to $\sum x_i e_i$ is surjective so, if $M$ is not flat, it must have a kernel. In other words, there must be some $(x_1, \ldots, x_n)$ in $\mm^n$, not all $0$, such that $\sum x_i e_i=0$. Without loss of generality, let $x_n$ be nonzero.

Set
$$\Delta := \sum_{\sigma \in S_n} \epsilon(\sigma) e_{\sigma(1)} \otimes \cdots \otimes e_{\sigma(n)} \in M^{\otimes n}.$$
Here $\epsilon(\sigma)$ is the sign of the permutation $\sigma$.
I claim that $\Delta$ is nonzero but $x_n \Delta =0$.

**Proof that $\Delta$ is nonzero:** By the associativity of tensor product, $M^{\otimes n} \otimes k \cong V^{\otimes n}$. The image of $\Delta$ in $V^{\otimes n}$ is nonzero, so $\Delta$ is nonzero.

**Proof that $x_n \Delta=0$ is zero:** Note that
$$x_n e_1 \otimes \cdots \otimes e_n = e_1 \otimes \cdots \otimes e_{n-1} \otimes \left(- x_1 e_1 -x_2 e_2 -\cdots - x_{n-1} e_{n-1} \right).$$
Similarly expand each of the $n!$ terms. You get an antisymmetric expression of degree $n$ in $e_1$, ..., $e_{n-1}$, so it must be zero.

andnonzero; does this suffice to conclude that $M$ is flat? If not (which I suspect), what is a counterexample? $\endgroup$ – Martin Brandenburg Aug 18 '11 at 9:38