There are lots of photography contests out there but not too many retouchers one, so I am compiling a list on free contests with real prizes on the web and also in magazines. If you know any, please post them, I love contests and challenges.
a. Retouch Pro (of course) - cash prizes
b. Editable Photos Retouch Contest -cash prizes
c. PSD Tuts - not ongoing BUT they have sweet prizes when they do create them
d. Model Mayhem Digital Artist Contests - there are some actual prizes like cash once in a while not too many. But it's good practice.