I just ran across your blog (http://mikejohnduff.blogspot.com/2008/11/anticipated-normal-path-of-development.html), and I feel you have interesting things to say. In certain ways, I think your reading here participates in the spirit in which Lacan or Laplanche reads Freud: you work through the Schreber history in somewhat the manner of analysis, in the sense that you are asking it to say what it resists saying and has to resist saying because it is talking about what can't be adequately discussed, the unconscious. So, that's my genuinely positive response.
My genuinely negative response regards your framing of the reading and your (mis)translation of the German.
I think you're smart to choose "ein Treib oder Treibanteil die also normal vorhergesehene Entwicklung nicht mitmacht und infolge dieser Entwicklungshemmung in einem infantileren Stadium verbleibt" as a key passage, but your translation doesn't work. Almost across the board.
1. 'vorhergesehen' is quite adequately translated as 'anticipated,' and though 'expected' would be plausible, there's no intrinsic reason for substituting it. (I don't anyhow agree that the difference there is as significant as you suggest, but my point here is just that it's a basically arbitrary substitution you're arguing for--reflecting, not prompting, your reading.) The German adjective 'vorhergesehene' is *not* "literally having seen ahead" (which, if you wanted it as a single adjective, would be a neologism like 'vorhergesehenhabende,' which to my knowledge no one uses, it being less awkward to say 'diejenige die vorhergesehen haben [or hatten]': "those who [had] anticipated). 'Anticipated' is an excellent translation in the original. Or, if you must, 'foreseen' or even 'forecasted,' though these would make the phrase unnecessarily awkward.
2. More seriously, 'mitmachen' almost invariably connotes participation in a process involving more elements than just that which 'macht mit' ('does with'). While I agree that 'accompany the rest' is an infelicitous translation, since it quite loosely adds words that aren't needed to get the point across, your redaction of it incorrectly denies the sense of a collective that haunts 'mitmachen,' and, what's worse, pointlessly focuses on an 'its' that is entirely made up, 'erfunden'!
This is to say, I think you're right in taking issue with the initial translation, and I think that the reading you want to do overall is interesting. I also think it's irresponsible that you make out as though a rereading of the German supports your position--you borrow an authority from a 'return to the original,' but forget that this authority carries with it an obligation to fidelity.
Here's an imperfect, but more faithful, translation of the passage you make so much of: 'that a drive or partial drive doesn't participate in normally anticipated development and, as a result of this developmental inhibition, remains in an infantile stage/state/position' (I prefer 'state,' personally, but Freud would probably be happier with 'stage,' and it fits better with the emphasis on the 'Phase' that starts off the passage.) Note that 'Entwicklungshemmung,' if we stick with the standardized 'inhibition' for 'Hemmung' in Freud's work, can only be as I have it above, or else 'inhibition of development.' An 'its' is not properly present in the original, which would have to read 'Hemmung an seiner Entwicklung' to make 'its,' and your argument about translation, make sense.
3. Finally, I think your desire to get 'cultivation' in there somehow is misguided. From a translator's perspective, unless context suggests that a word is doing different kinds of work when used two or three times in a row, it's best to stick with one translation. There's nothing to indicate that Freud goes from meaning 'development' when he writes 'Entwicklung' to suddenly meaning 'cultivation' (which has a range of translations in German--'Entwicklung' *not* usually among them, though it is possible) when he writes 'Entwicklungshemmung.' Obviously, what's at stake here is a matter of interpretation, but to translate a word two different ways when it appears twice in a sentence usually requires strong evidence that it is doing different kinds of work.
Although I think your deeper thesis is interesting, that it has something for it, I'd strongly encourage you to do some more serious work tracing it out in terms of Freud's own resistances, rather than by claiming to have more directly accessed his (conscious) intent. If you end up doing such a project, I'd be interested to read it. Also, I realize I've written rather sharply; I'm sorry not to feel able to apologize for this. While we all offer inapt translations here and there, yours feels simply disingenuous--almost entirely indifferent to the valences of the original. In which case, why translate?!