Well when I was chatting with stephen who helped me on my Character Name´s FAQ we were discussing the possibilities of whether or not he should be called Lieutenant.
The reason why I thought of his as Lieutenant is because K-F, the german anime and the german manga have called him that way.
Stephen said that Taii could mean both captain and lieutenant, but then in context with the other ranks that lieutenant makes more sense then captains because it was that way:
Taii - Chuui - Shoui
and then the translation Lieutenant - First Lieutenant - Second Lieutenant
sounds better then Captain - First Lieutenant - Second Lieutenant.
Just the two cents of somebody who actually doesn´t speak any japanese. But I see similarities like with the adecuate translations here. If you change it a little from the original stuff but you make it to transfer a plausible meaning or message to the reader who doesn´t understand japanese then I think its a good thing. Having two different ranks by the name of captain is more confusing then helpful for people who just can read the translations (like myself). That also has to be considered. 1 to 1 translations aren´t always the best because of the cultural differences within languages themselves.