New changes:

Process tag "DESCRIPTION" not as <TRANSLATE> type only but as <STRING> too
fixed possible crash on some unuseful dialog

you can download it from yandex.disk service
here is my thread http://torchmodders.com/forums/tips-tools/(tool)-another-localization-tool/
links on latest tool version in first post.
how to use...
1 - unpack mod
2 - start that tool (change some options before, if needs)
3 - Ctrl-N for text lines generate (choose mod folder there)
4 - scan files
5 - save file after scan complete.
when scan complete, you will see table with file of text, tag, source text, checkboxes to mark translated text as partially translated, empty column - place for translation.

STRONGLY recommended to keep somethere TRANSLATION.DAT file from game directory with your language (if it presents) or from mod with game translation.
guts: create new project, set the name. then make directory for translation file - all text placed into TRANSLATION.DAT always, check how other mods do it. place your translation file and compile mod.

I hope, you will understands how to do it all properly by yourself

it was almost one year ago. and that steam modder still online. interesting, he got answer?

i think, most of modders, especially who made localization, must to know.
shortly: when you produce final file, need to rename it to TRANSLATION.DAT and place to directory as in main game.
if you unpack main game PAK file by GUTS, it will be inside MEDIA direcotory..
Ummm...
for me, it
G:\Games\Torchlight 2\MEDIA\TRANSLATIONS\RUSSIAN\RATRANSLATION.DAT
before, i made empty mod, named dummy.
so, all i did, just created directories and file inside:
G:\Games\Torchlight 2\mods\dummy\media\TRANSLATIONS\RUSSIAN\TRANSLATION.DAT
then build mod and added to mod list at first position.
of course, if need to add unimplemented language, you will need to make additional file like
G:\Games\Torchlight 2\MEDIA\TRANSLATIONS\RUSSIAN.DAT
with content
[LANGUAGE]
   <STRING>DISPLAYNAME:Pусский
   <STRING>NAME:RUSSIAN
   <INTEGER>AUDIO_TRACK:3
   <STRING>TRANSLATIONFILE:MEDIA/TRANSLATIONS/RUSSIAN/TRANSLATION.dat
   <INTEGER>ID:2
   [FOLDERPAIR]
      <STRING>ORIGINAL:MEDIA/UI/
      <STRING>TRANSLATED:MEDIA/TRANSLATIONS/RUSSIAN/UI/
   [/FOLDERPAIR]
   [FOLDERPAIR]
      <STRING>ORIGINAL:MEDIA/
      <STRING>TRANSLATED:MEDIA/TRANSLATIONS/RUSSIAN/RANDOMNAMES/
   [/FOLDERPAIR]
[/LANGUAGE]

THAT JUST EXISTING GAME EXAMPLE

sorry, i not too PRO in documentation writing. I hope, Kva3imoda can describe it better.

PS. almost implemented separated code for different internet translation services, not yandex only, will add to program soon.

Updated program. Shortly:
no ref = hide columns,disable button
ref: root dir saved
config processing changed from custom to standard class
"About" text changed
'Build' (Ctrl-B hotkey) mode added. Build translation from default file and files from Import directory
Delete "Keep Space at the end" setting
Show '~' as mark if original text ends by space
Show source file with doubleclick on file/tag column (Alt-S hotkey)

look Varian Classes thread , how changelog made there. OR you can write changelong in separate post with links in 1st post. NVM, it your mod - your decisions.

...damn, looks like i need to share more contacts in my profile...

I don't know really. If peple have internet, they can go to first post of this thread, then go to steam and read changelog there. So, you can post it there if you want but it not 100% necesary if you upload mod to steam only (but can be nice anyway). What about me, i worries much more about texts of that mod (for russian localization purposes).. But really, i tired to translate amny of mods already coz my english is not so good.
Well, after reading changelog (but not downloading yet - not steam game version) i thinks what my program will change it translation automatically, so it can be done later. Anyway, thanks what you post announce there (coz else i can not to know about it).
Sad but last 1,5 months i was busy with program and didn't play at all (except Freecell game on my phone)