Damn. That's great. :) And with a little change it's strict compliant and shorter too:

{
    local *_ = \substr $source, $start, $len;
     y/a-zA-Z0-9\n\|-/ /c;
     y/'//d;
}
[download]

Update: changed order of transliterations to account for the deletion of characters causing extra characters to shift in.

Makeshifts last the longest.