*light bulb illuminates*
I re-examined the Babelfish form HTML source... I was thinking it was specifying utf8 as the form encoding type, and was preparing to patch Babelfish.pm to use that encoding, but when I looked more carefully, I realized what I had seen was a hidden field... enc=utf8.
Patching Babelfish.pm as follows does the job, as long as the input has been converted to utf8:

--- WWW/Babelfish.pm~   Wed Feb 21 10:33:42 2001
+++ WWW/Babelfish.pm    Thu Feb 22 08:56:09 2001
@@ -148,7 +148,7 @@

   CHUNK:
     foreach $chunk ( $self->_chunk_text($MAXCHUNK, $para) ) {
-      $req = POST ($BABELFISH_URL, [ 'doit' => 'done', 'urltext' => $
+chunk, 'lp' => $langopt, 'Submit' => 'Translate' ]);
+      $req = POST ($BABELFISH_URL, [ 'doit' => 'done', 'urltext' => $
+chunk, 'lp' => $langopt, 'Submit' => 'Translate', 'enc' => 'utf8' ]);
       $ua = new LWP::UserAgent;
       $ua->proxy('http','http://' . $self->{proxy}) if defined $self-
+>{proxy};
[download]

--isotope
http://www.skylab.org/~isotope/