Great article, I had to do something similar few years back. Good to see some of the ideas we had were the same. Just wait till you have to mirror the site for Arabic etc. That's when it gets fun.
How can a website nowadays need 9 months to add a new language? I mean good article, but seriously. If you have to refactor your whole codebase to add i18n, you did it very wrong in the first place.
We did something similar due to very old/messy code, but not with a 3rd party service. We just built an Apache OutputFilter that recognizes text (also in alt, title, button value attributes) and replaces it based on a set of more than 200k regexps. Sounds slow, but works fine due to (tmpfs + mmap based) caching after some warmup. The first working prototype took about 4h.<p>We'll never do it like this again though!