This would be a good question for fyeahcopyright: if you're ficcing a folk tale, which is in its own sense, fic itself, can it be construed violation even if you read the source in a copyrighted translation? I mean, they're transforming the story themselves, presumably. The story itself is in the public domain: this is why there can be 1,000,000 versions of Snow White and Cinderella while Disney still owns the copyright of their movies.
How is what you're planning to do any different than say Ella Enchanted (either version) or Ever After did with Cinderella?