I'm having trouble deciphering Japanese spoken at native speed...?

As a English learner, I can understand what you feel. How about speaking actual Japanese with ordinalry Japanese people using SKYPE? Not every Japanese is kind and polite, but I bet will be able to find some Japanese who will glad to teach you Japanese. (because sometimes I also teach foreigner Japanese on Skype)

I studied Japanese for 3 years, it makes me kind of sad every time I watch a Japanese TV show (and there aren't a lot to watch) and can catch only a small portion of the dialog. Now I am learning Hawaiian, there is nobody to talk to so I talk to myself. Quietly, when I am alone. It helps to actually speak whatever language you are learning, it helps your brain find the words and form the phrases and thoughts so even if you have nobody to talk to but yourself it can only help. Good luck.

Having a Japanese teacher speak to you in English is a tremendous handicap. This causes exactly what you are doing. Translating in your head. What you are really doing is hearing individual Japanese words that you know and thinking of what you think is a close approximation of that word in English. Then, grouping those words and trying to make sense of that English. This takes a lot of time and "computing power". Not only is it inaccurate it trains you to only listen/hear words you think you know (in English). When you try to reverse that process and speak Japanese you find that you don't know how to construct sentences because you have only been listening to those words that you already "know". You become not fluent but fairly good at guessing meaning and a rather poor speaker (like delita above). You need to be able to speak and listen to conversation that is appropriate for your level. Maybe your host sister would be willing to help you out.

Just keep working on the listening skills. Language develops in 3 parts, reading, writing and listening skills. It appears you've taken well to reading and writing, but you have not integrated the listening. That's the hardest and last step before mastering a language. As long as your not around native speakers, you don't have a lot of chances to develop the listening skills. Watching anime helps a bit too, but nothing beats having a conversation with someone. In my case, my listening skills are strongest out of the 3, while I can BARELY speak, and I read/write at kinder level, I seem to understand some conversations. But this is because I've been to Japan so many times and for extended stays that I've picked up on listening. I listen every chance I get to shopkeepers, friends, and my boyfriend's family. The best way to go is speak to a native. My boyfriend is the same with English. He's got native reading/writing skills but hasn't been exposed to foreigners much so his listening skills are really bad. He has your exact same problem. So again it's all a matter of speaking with native Japanese.

"Practice makes perfect" I feel this is true. Joshi is annoyed me too. The best way is to repeat . And you had better try to call host sister as possible as you can. I'm still watching DVD such as 24, prison brake, x-files, repeatedly. With best wishes !!