IIIT (Indian Institue of Information Technology) has a Language Technologies Research Center that has produced morphological analysis tools for several Indian languages; however, they are quite old and unmaintained. I have updated the one for Telugu to work on a modern Linux system (AMD Opteron 64 running Fedora Core 5). The source code (released by IIIT under the GPL, v1) with my modifications is available here:
Much of the software included is identical to that in the morphological analyzers for Kannada, Marathi, and Punjabi. So, if you are having trouble getting them to work this software might be a decent starting point.
I know next to nothing about this software. If you have questions, I will probably not be able to answer them!