While there are a number of sites that offer tumbling services, such as bitfog and the "shared coin" feature of blockchain, you have to accept a certain amount of risk that they may run off with your coins, get pwned while they have your coins, or at least that their methods will be ineffective under intense LE scrutiny. While it may be more cumbersome, transferring between altcoins can be a more effective means of obscuring the origin of your coins than any tumbling service can provide; with the added benefit of maintaining better control of your coins during the process. The following guide will outline this process.
PRE-REQUISITES
A "clean" bitcoin wallet (never sent coins to or received coins from a darknet market/vendor/customer)
A "dirty" bitcoin wallet (used to send coins to or receive from a darknet market/vendor/customer)
Both "clean" and "dirty" wallets for your altcoin of choice (more on that later)
You SHOULD have all of these wallets installed under TAILS for security and anonymity (preferably seperate USB sticks for the clean and dirty wallets.) If not, your wallets should at least be configured to use the Tor proxy so you're not broadcasting your IP whenever you make a transaction.
INSTRUCTIONS
Launch your Tor Browser, preferably from a TAILS environment.
Create two free anonymous email accounts through a service like hidemyass (make sure they don't expire for as long as possible.) One of these email accounts will be for your "clean" exchange account and the other for your "dirty" account.
Create an account on an altcoin exchange site with your "clean" email. I usually use cryptsy, but I've seen a lot of complaints about them floating around lately so find a site you feel comfortable with, but make sure they do enough volume that you won't be waiting for days for your trades to go through.
Create a new identity in Tor (to change your exit node) and then create another account on the same altcoin exchange with your "dirty" email.
Create a new identity in Tor again and then log in to coinbase or LBC or wherever you get your clean coins from. Send those coins to your "clean" exchange account.
Log in to your "clean" exchange account and trade your BTC for an altcoin like Vertcoin, Litecoin, Darkcoin, or Dogecoin. I personally use Dogecoin because they have a high trade volume and there are instructions for installing the dogecoin wallet in TAILS. I would prefer to use Darkcoin, but the trade volume is still low at times and I can't get the wallet running in Tails. I don't do ANYTHING with coins, exchanges, or markets outside of Tails and you shouldn't either.
Withdraw the altcoins from your clean exchange to your clean altcoin wallet.
Send the altcoins from your clean wallet to your dirty altcoin wallet.
Send the altcoins from your dirty wallet to your dirty exchange account.
Create a new identity again, log in to your dirty exchange account, and trade the altcoins for bitcoins
Withdraw the bitcoins from your dirty exchange account to your dirty bitcoin wallet.
You have now broken the chain of ownership between the coins you purchased legitimately and the coins you intend to use nefariously. Profit??
EDIT: Wrong link
This is great! I'm going to add this to our "Informative Community Posts" wiki if you don't mind. Thank you for the post! :)