Well, it depends on who's doing the translation. For example, the problem with DOTV was that much of the original German material was either discarded or ignored when it came to translating the lyrics. There was some (in this case, obvious) disconnect between what Kunze wrote in German (as you said, he's a master of turning a German phrase, with a fabulous grasp on how to plot out the line of action in a musical), and what eventually crawled out of the bag.
For me, the talent of the person doing the translation is an obvious key, but the other one is to go back to the German and translate it directly into English, and start from that point, refining the lyrics until they convey the same idea but are "singable" (if you know what I mean). One should only make changes on the scale of Herbert Kretzmer to
Les Mis if it becomes necessary to add or delete material for any reason (including character development, a refined plot, etc.), or if the original idea just does not translate to an English stage. (As Kunze himself said, he wouldn't have minded if DOTV changed a few things for regional sensibilities, a la Japan not depicting the madman in
Elisabeth because it's a cultural taboo to show crazy people onstage, but instead they changed the whole show, and you know the rest.)
"There is no problem so big that it cannot be run away from."
~ Charles M. Schulz