This is how I make ringtones out of any mp3 in my itunes library, regardless if it was purchased through the store or downloaded. I'm not sure if it works on a PC but it does for Mac.
Find the song you want to make a ringtone of and right click it and click get info. Then navigate to options and where it says start time and stop time enter the part of the song that you want to make a ringtone of. Keep it to about 20-25 seconds. Then click ok.
Click the song and then click "advanced" on the top bar and then click "create AAC version". This will then create a shortened copy of the song below the original depending on how long you made the tone.
Drag the new copy onto your desktop and change the extension from ".m4a" to ".m4r", which is the extension for ringtones.
NEXT MAKE SURE that you go back into iTunes and delete the AAC version copy that was made. Select move to trash when given the option otherwise it will not work.
The last step is to double click the new .m4r ringtone on your desktop and if all goes well it should pop up in your ringtones sections on the iTunes toolbar.
Next time you sync your iPhone make sure that sync ringtones is selected and all the tones you have made will be available to use as ringtones on your phone.
If you have any questions or any trouble let me know. Pretty easy and fast way to make free ringtones of any song you want.