You're much better off just getting someone who knows what they're doing translating it in the first place. Translation checking is a luxury some localization projects have, but at least in fan translations, it's largely there to compensate for the fact that most of the people working in fan translations just aren't very good translators. 99% of the time, if they were passable at translating, they'd get out of fan translation and translate for a living.
If the translation is best described as garble, no editor can save it short of going to check every translated line and effectively redoing the work. I think what you're saying here is predicated on a mistaken assumption people often make when talking about localization: that there's some sort pidgin language between Japanese and English (let's call it Fantranslationese). Bizarrely, some people not only believe in the existence of Fantranslationese, but they have even convinced themselves that they prefer to read Fantranslationese over English. But make no mistake: Fantranslationese is not a language, and it does not communicate anything like what the original Japanese did and what a decent English translation would. Fantranslationese is a pale shadow of a language, and an editor can only do so much to fix a "translation" attempting to use it short of retranslating the work because the editor otherwise doesn't actually get an experience like reading the original. Relying on editors to inject flair into a Fantranslationese script means you lost all the flair that was in the original. You're certainly not there yet, but you're well on your way to writing fanfiction instead of a translation, if you go this route.
Editors should be polishing a translation, smoothing out rough edges and ensuring consistency. They absolutely should be fixing the translator's mistakes, always with the aid of the translator, because the editor sees the work differently and therefore is going to rarely find translation mistakes due to their different view. This is a given especially because of how ambiguous and context-dependent Japanese is.
I never want to work on any project with a translator who believes this.
Finding someone who can both write and translate is pretty hard, Zaka. In a world where most people lose their ability to understand the written language the second they get out of high school or college, that's asking a bit much. *Clephas smiles, malice dripping from every word*
That said, speaking from the translator's point of view... that won't work. Most people simply don't have the ability to construct coherent sentences while bringing text over from another language. That is why both edit and tlc stages become necessary in most cases. Not to mention that translating VNs is a lot of work, so the translators often just don't have the energy for it.
How much Japanese does an editor need to know? That's a decent question... to be honest, rather than trying to double up a translator and editor, it makes a lot more sense to just have a translation-checker do the first run edit. In my experience, 90% of a good translation checker's job ends up being making the raw translation make sense. TLC is a lower stress, less time-consuming job than translation, in general... and unlike a Japanese-incompetent editor, he generally has a better chance of figuring out what's wrong and knowing when to look deeper. Ideally, the regular editor's job would just be smoothing the rough edges and/or turning dull text into prose.
Another thing is that most people in the community will never even try to experience fantl from the other side of things... they don't realize how much time it eats up, that emptiness you feel when you realize you've used dozens of hours of your personal time only to put out a patch that people bash left and right for 'errors' and other shit. If you make a fantl patch good enough to attract a company's interest in a localization, please do cash in. I'll cheer for you with all my heart (this statement is a generalized one directed to all fantl groups).