We aren't fluent no.... but that is not required and a LOT of fansubbers don't have access to fully fluent people and it shows...even on the first episode by TV Nihon they haven't done the best job of being liuteral in places they should.
alot of the things said prolly wouldn't be in most dictionaries...
Erm.... no that's not true. There are basic Japanese to English dictionaries that might not have all the words and even some better ones that wouldn't. But with a plain Japanese dictionary it would certainly have all the words they use (might need a slang dictionary too). If you know enough Japanese it's fine to use a Japanese dictionary, as with English you might not know an English word but if you read a description using other words you know then you can learn the meaning of that word.
As i said it would be a slow process as we are both busy with UNi and other work but at the very least we could get episode 7 done reasonably quickly as i have already half translated it myself