[Stingo]

I found a temporary solution to the Kindle Touch foreign language dictionary problem! It all has to do with the book encoding. If you want the foreign language dictionaries to work the book language has to be set to English.

If the book is encoded for English, regardless of the language of the book, the Kindle Touch will look up words in what it considers the appropriate language. In other words if you have a book with English and Spanish in it, and it is encoded to English, the dictionary will generally look up English words in the English dictionary and Spanish words in the Spanish. If you have a German book and encode it with Calibre to English, the Kindle Touch will look up the words in an approved German dictionary if you have one installed.

On the other hand, if the book language is set to anything other than English, the dictionary will return "Dictionary not found for language of book. Download from Archive."

Hope this helps and that Amazon fixes this bug.