In the US, only the changes to a derivative work are copyrightable
1, and translations would not apply. So if FFIV was a fan made translation, they would have protection on "You spoony bard" but not too much else. Per copyright.gov's paper I just posted:
So if you make a derivative work, you MUST have legal right to do so. If you do not have permission, you need fair use. Fan fiction almost never falls into fair use, and translations would never ever fall into fair use. So it would have to pass the 4 pronged test
2, and translations would always fail on #3.
The re-translations you mentioned fall into a completely different category. There's no current copyright holder of the original text, so it's public domain. So the translations are wholly owned by their current translators, but only the changes. The copyright does not extend to the whole text, just what the translators did. So anyone can retranslate and enjoy
slight copyright protections. The only way their copyright can mean squat though is if they can somehow prove someone used their text, and not the originals, in work. You can't say "They used 'the count of Monte Cristo' in their book, I have copyright to it!" because Le Comte de Monte-Cristo has a 1:1 translation to English. Also, aren't you in that book?
So let's just say some people translated a game, I'd say hypothetically it's Ys IV. Say there's two people working on it, I'll make completely made up names, darkwolve and truce. Say darkwolve was the one who did the code work, he dumped the script, changed fonts, moved code as needed, and inserted the new script. The only things he could have copyright protections on is any code he added, and maybe the font if he made his own. Truce, on the other hand, would have copyright ownership of his version of the script, but it would be unenforceable. Meaning he can sue people, but would lose. They still have to go to court. And while he would always lose, there's not always a win\loss situation. If say a completely made up company, yseed, wanted to use this translation, they could base theirs off of truce's copy, but would have to make 100% sure they don't reuse anything he has copyright for, so wording and any mistranslations. And in the cases where a line can be translated more than one way, you can't use truces lines. If they just dumped it in, what would likely happen is depending on the judge, truce may or may not get a small amount of funds, or most likely, the game would have it's publication stopped. duce, I mean truce, would also be open for a copyright lawsuit. He would completely fail the fair use test on point 4, and would lose his copyrights. To get around all this legal issue, yseed decides it's best just to buy the rights to the derivative, and everyone but darkwolve is happy. darkwolve instead suffers a mental breakdown
3
As for fan fiction, if someone wrote a fan fiction where Captn. Picard took a flying carpet and saved the US from terrorists, I'd have some major legal issues trying to publish a book about that. But if I owned the rights to Picard, and had him on a magic carpet, and the fan fiction writer tried to sue me, their work would most likely, depending on the judge, not have enough transformative value for protection on it's own. And while you say authors have been sued over fan fiction, I've not actually been able to find any. Marion Zimmer Bradley had some involvement, but there were never any actual suits in her case.
1.
http://www.copyright.gov/circs/circ14.pdf
2
http://www.copyright.gov/title17/92chap1.html#107
3
http://www.ysutopia.net/
Edit: Missed where you said a name, Mercedes Lackey, was sued over fanfiction, but I can find no proof of that. Or even rumors of it.