Erica,
You wrote: ‘ I import the idml files as new sections and using different master pages for each language. The styles are shared across the languages and all works beautifully EXCEPT for hyphenation.’
Language and, thus, hyphenation is a function controlled by para. and/or char. styles so, if you are using one set of styles across all languages, hyphenation will be controlled by the language and hyphenation settings in the styles applied. My first impluse is to suggest that you set up a template for each language with that language and its appropriate settings for hyphenation set in the styles. The documents with the text for each language can be tied together with a book file. The alternative is to create a set of styles for each language in one master document, not a procedure I recommend.
You will also need to choose the appropriate options for each language in Preferences > Dictionary. If the hyphenation and spelling dictionaries supplied by Adobe are not adequate, better dictionaries from third parties can be installed.
You might find the plug-in, Search in Styles, from Id-Extras.com useful.