You could generate CAPTCHA images on your own server without connecting to any external servers as follows:

1. Draw text on an image that contains letters and/or numbers.
2. Use image processing to distort or camouflage the contents of the image to make it hard for OCR software to correctly read it.
3. Display the image on the website, possibly with a secondary mechanism like asking a common-sense question from a question bank.

For the second step (image processing), the company I work for has an image processing Java library that contains hundreds of functions. I took samples image with digits in them and wrote code to perform random distortions on it. The attached image shows 3 input images alongside the output that resulted from running the code on them.

This is the code I used:

public void GenerateCaptcha(RasterImage image) {
   Random r = new Random(); 

   // Add some white noise to combat edge detection algorithms
   AddNoiseCommand addNoise = new AddNoiseCommand(50 + r.nextInt(50), RasterColorChannel.MASTER);
   addNoise.run(image);
   
   int stepDiv = 3;
   int xstep = image.getImageWidth() / (stepDiv + r.nextInt(stepDiv));
   int ystep = image.getImageHeight() / (stepDiv + r.nextInt(stepDiv));
   for (int x = 0; x < image.getImageWidth(); x += xstep)
   {
      for (int y = 0; y < image.getImageHeight(); y += ystep)
      {
         xstep = image.getImageWidth() / (stepDiv + r.nextInt(stepDiv));
         ystep = image.getImageHeight() / (stepDiv + r.nextInt(stepDiv));
         LeadRect rect = new LeadRect();
         rect.setLeft(x - xstep);
         rect.setTop(y - ystep);
         xstep = image.getImageWidth() * 2 / (stepDiv + r.nextInt(stepDiv));
         ystep = image.getImageHeight() * 2 / (stepDiv + r.nextInt(stepDiv));
         rect.setWidth(xstep);
         rect.setHeight(ystep);
         image.addEllipseToRegion(null, rect, RasterRegionCombineMode.SET);
         InvertCommand invert = new InvertCommand();
         int brightness = r.nextInt(400) - 200;
         ChangeIntensityCommand intensity = new ChangeIntensityCommand(brightness);
         intensity.run(image);
         invert.run(image);
         ystep = image.getImageHeight() / (stepDiv + r.nextInt(stepDiv));
      }
      xstep = image.getImageWidth() / (stepDiv + r.nextInt(stepDiv));
   }
   image.makeRegionEmpty();

   // Add a bit more white noise
   addNoise.run(image);
}

If you would like to try the library, there’s a free evaluation edition on this page.