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If this comes to pass, Google's project Loon won't look so looney. http://www.wired.com/2014/06/google-balloons-year-later/

Unfortunately I don't think there's any feasible replacement for GPS satellites.

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Ground stations can replace GPS. It might not be universal, but it for people inside a country it would work.

http://www.popsci.com/technology/article/2011-08/ground-base...

Perhaps it would be possible to do positioning from balloons that reference ground stations or stars. It would be more expensive than the current systems but cheaper than a fully ground based system.

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