I. Standard Translation
Psalm 114 is very familiar because it is part of Hallel, the group of Psalms recited liturgically on holidays, Rosh Chodesh (beginning of the new month) and at the Passover seder. The first verse has an unusual word that is surprisingly translated universally the same despite the availability of an alternate, and arguably preferable, translation.
בצאת ישראל ממצרים בית יעקב מעם לעזThe traditional translation (Old JPS and KJV) is:
When Israel came forth out of Egypt, the house of Jacob from a people of strange languageMe-am lo'ez (מעם לעז) is rendered as "from a people of strange language" (hence the title of the famous Ladino anthology of commentaries on the weekly Torah portion: link). The word lo'ez is unique in the Bible. One possibly related word is in Isaiah 33:19 - "es am n'oaz". Rashi (ad loc.) says that "no'az" is another form of "lo'ez" and renders the phrase, "a nation speaking a foreign language". Ibn Ezra, however, believes it comes from the word "az" and the phrase means "a strong nation". That is also how Targum understands it, translating no'az as takif.
II. Talmudic Translations
Absent any biblical hint of the meaning of lo'ez, commentators went to the Talmud. The Mishnah (Megillah 2:1) uses it to mean someone who speaks a foreign language, in the context of whether one can read the scroll of Esther on Purim in a different (non-Hebrew) language for the benefit of people who understand that language. Therefore, Rashi and other commentators translate me-am lo'ez in the verse as meaning "from a nation that speaks a different language". Some see this as meaning that the nation was entirely foreign, either that the Jews heroically failed to assimilate or that it was simply inhospitable. However, there is an alternative to this translation which, arguably, allows for an even better interpretation.
R. Donash Ibn Librat, in his critiques of his mentor R. Sa'adia Gaon's Arabic translation of the Bible (see this post: link), offers a different translation of the phrase. R. Sa'adia Gaon evidently translated as above. R. Donash (par. 45) points out that the term lo'ez is predominantly used in the Talmud in a different fashion.
The Arukh (not quoted by R. Donash) has two entries for la'az. The first refers to the Mishnah above, which uses the word to mean someone who speaks a foreign language. In a parenthetic comment, the Arukh (or a later gloss) states that this is the meaning of the phrase in our verse. The second entry translates la'az as slander or denigrating language. This is, indeed, the predominant usage of the term in the Talmud (e.g. Pesachim 51a; Gittin 5b; Kiddushin 81a; Nidah 13a).
III. Alternate Translation
R. Donash suggests that this latter meaning is the correct translation of me-am lo'ez. The phrase refers to an oppressive nation; the Jews were taken from Egypt, whose people were denigrating and oppressing their slaves. R. Donash points out that lo'ez in Arabic means a destroyer and an adulterer, similar to this translation of "oppressor".
Interestingly, R. Donash is most famous for his critiques of R. Menachem Ibn Saruk's Machberes Menachem. However, in this case, R. Menachem and R. Donash seem to agree. R. Menachem (sv. laz - link - PDF), explains me-am lo'ez as "inyan zadon hu", which probably here means "malicious nation". This seems closer to R. Donash's translation than Rashi's and R. Sa'adia Gaon's.
Targum on the verse translates lo'ez as "barberai". My initial inclination was to align this with R. Donash, referring to a barbaric and oppressive people. But that is probably just a modern connotation of the word. Jastrow translates "barberaya" as meaning simply "foreign people," which corresponds with Rashi's traditional translation.
The only other commentator I could find who even mentions R. Donash's translation is Ibn Ezra, who notes the two talmudic usages of the word. I could not find any other commentator or grammarian. For example, R. Yonah Ibn Janach (Sefer Ha-Shorashim sv. laz), Radak (commentary, ad loc.; Sefer Ha-Shorashim sv. laz) and R. Menachem Meiri (commentary, ad loc.) all translate me-am lo'ez as "from a nation that speaks a foreign language". I found this highly surprising
R. Donash's translation seems to me to be preferable. Is it really such a big deal that the Jews were enslaved by a foreign nation that spoke a different language? Granted, this allowed for greater misunderstanding and less assimilation. But, really, that only applies to the first generation of immigrants. Later generations were certainly able to communicate in Egyptian, even if it wasn't their primary language. Note that the Midrash consistently lists four reasons that Jews were redeemed from Egypt (which, in various versions, sometimes include that they didn't change their language, clothes and names). Clearly, language alone was not a sufficient barrier to assimilation and other factors contributed. Why would the verse only mention language? It seems more significant to me to describe the Egyptian people as denigrating and oppressive.
IV. Modern Translations
I could not find a single English translation that significantly differed from the standard approach. Even Robert Alter (The Book of Psalms: A Translation with Commentary, p. 433) translates the phrase as "barbarous-tongued folk" and R. Aaron Lichtenstein (not the son-in-law of R. Joseph B. Soloveitchik), in his recent The Book of Psalms in Plain English, translates it as "foreign land". My admittedly brief internet search of Christian and academic translations and commentaries yielded a similar result -- translations referring to foreign language, foreign nation or foreign land.
R. Amos Chakham, in the Da'as Mikra commentaries to Isaiah (33:19) and Psalms (114:1), similarly adopts the standard interpretation. In the latter place, he explains (in a somewhat forced fashion, in my opinion) that because they spoke a foreign language, they were oppressive.
Interestingly, the only approaches similar to that of R. Donash I have found in modern writings are in homiletical commentaries to the Passover haggadah. For example, R. Chaim Yosef David Azulai (the Chida), interprets the phrase in his Simchas Ha-Regel commentary to the haggadah as referring to denigration. Interestingly, he says nothing about the phrase in his commentary to Psalms. I have found some other haggadah commentaries that similarly translate the phrase according to the second talmudic usage, like R. Donash, but proceed in a more homiletic direction.