Even if you want to preserve literal meaning, an example that comes to mind, but which I can't quickly source: IIRC the original Metroid manual, in Japanese, referred to Samus with a gender-neutral pronoun. In English, you basically can't do that without calling attention to it. 'They' and 'he/she' are unusual enough to read awkwardly; 'it' and 'he' would be incorrect; and 'she' would give away the twist. Whatever you choose, you're losing something, and it's a judgment call as to what.
Umberto Eco, in Mouse Or Rat?[1], describes two different approaches to translation, (I'm paraphrasing here) source vs. target. Your example is a good one, but it actually only touches on grammatical differences. There are cultural differences too.
For example, if I'm translating a cricket (the sport)-themed story from Australian English into Japanese, do I retain the cricket references, and have the meaning be unintelligible to Japanese readers with no knowledge of cricket? This is what Eco refers to as source translation, which is closer to a literal translation.
Or I could change the cricket references to baseball, which is more appropriate in a Japanese context, and Eco refers to as target translation. The purpose here is to convey the feeling, more than remaining true to the literal meaning of the original text.
[1]: http://books.google.com.au/books/about/Mouse_Or_Rat.html?id=...
There is a huge amount of potential information on the web but it's rarely well curated and the next big problem is how to extract it.
[1] See http://www.independent.co.uk/life-style/gadgets-and-tech/fea...
[2] http://googleresearch.blogspot.com/2010/10/poetic-machine-tr...
Machine translation is still one of the most funded areas in NLP, and the quality is still incredibly bad for many language pairs. DARPA has been running one machine translation grant program or another for more than a decade.
It is true that some of the best systems take a long time to translate sentences (on the order of 1 cpu-minute or more). But their quality is still not anywhere near human level for most languages.
AFAIK, current state of the art translation systems are not working with a layered approach as you defined (morphology->syntax->semantics->interlingua?). First, they do not use interlingua. They use statistical models from example translations (translation model) and target language (language model). They started to include syntactic and semantic clues recently but it is mostly adding extra information to the models and alignment-search process.
So computational complexity is not the real issue when it comes to translation quality. For most (if not all) languages, systems simply cannot achieve human translators level yet. For languages that lack large amount of example translation texts, machine generated translations are still terrible.
If that's the case, can you link me to the source code? I have a couple of extra computers I can run it on.