trademark dilution is only applicable where direct product competition (and on a large scale) is in effect.
No way. The Danish rockband Disneyland After Dark is probably a prime example of this. I'm sure hundreds more exist. i know theres treaties between some countries, but do they cover dilution in this way?
No, but most countries have their own trademark laws, similar to the US - here is a link to the Danish one. I would like to see this answered in black and white too because i think its something that we would all find useful as either a guide / warning etc.
Most laws are not as black and white as you would like them. That's why we have lawyers and judges. For instance (in the US) the first amendment means that "gripe sites" (like http://www.fordreallysucks.com and http://www.fuckverizon.com ) are allowed to use the respective trademarks under free speech provisions. However commercial use (like having banner ads on said sites) would eliminate any "free speech" protection.