If translation were a science, we would not see so many translations of great works, nor would they be so different. I'm thinking of Beowulf, which has both prose and poetry translations and many permutations from there. Even a more modern play such as Cyrano de Bergerac has multiple and diverse translations. If it were a science, we'd have one translation of every work rather than many.
Science is exact and translation is not. I would agree, therefore, that translation is an art rather than a science. There are so many viral pictures on the Internet illustrating this point. We've probably all had a good laugh at pictures of signs that were translated incorrectly. There are many computer programs out there that will make an exact translation, but that doesn't mean they are correctly translating the meaning. It takes special skill and art to understand the nuances of multiple languages well enough to translate the meaning rather than just the words.
The term "lost in translation" suggests the almost insurmountable task of translating from one language to another. For, after all, language itself is a culture and it denotations and nuances are only known by those who have been immersed in the culture of the target language.
To translate poetry, whose language suggests so much to one of the culture, is a formidable task and one that often is unsuccessful because of the fact that one must understand a culture before one can comprehend its figurative language. Only a true artist can attempt such translations.
As a supporting note, there was a Korean exchange student who read Great Expectations with the 9th grade class in which she was put. After having read Dicken's classic in Korean, she noted the tremendous difference from the Korean and English version: "So much was incomprehensible. I understood the plot, but how much more I enjoyed the style and narrative by reading it in its original form."
I will chime in with "art" as well. There are so many things to include in translation in order to convey the "big picture"--body language, tone of voice, inflection, in addition to the word's meaning (many shades of meaning in some languages). Take, for example, the fact that eskimos in Alaska have over 300 words for ice and snow. The rest of us have "ice", "snow", "hail", and maybe "yellow snow". There's a lot to be lost in translation when they have so many different shades of meaning. To get it right is definitely an art.
My sister in law did a Masters in Literary Translation, so I would have to agree with #1 by saying that translation is definitely an art. There is no such thing as a scientific translation - there is no scientific formula of how to translate Nabokov for example into English, and Nabokov himself wrote extensively about the impossibility of accurate translation. Translation is an art form that tries to capture the spirit of the original in a new language. I often find it helpful to think of it like making a movie out of a book. You try and keep the original spirit but the packaging is very different.
Definitely an art. There are so many nuances and subtleties of meaning in any language that it becomes very difficult to decide how to render those words into another language.
I have seen this myself when I have tried to explain passages in books (even kids' books) for friends of mine who are only fluent in Japanese. Their English isn't good enough to understand the nuances and my Japanese isn't good enough to always pick the right word to convey the whole meaning.
For example, think about the very slight differences in meaning between the words "happy," "glad," "cheerful," "joyful" and "pleased." Now think about having to decide which word in another language is needed to translate each of those words. Definitely an art...