I am in a scanlation group with one other person. We don't really call us a scanlation group, as we are focused on only one thing (doujinshi) and one pairing only. It's an obscure pairing, and me and my friend were very sad that no one ever tried to translate it. So we took it upon ourselves to scanlate them when we found doujinshi for them.

The doujinshi don't get many downloads, because again, it's an obscure pairing, but the people who do find it, thank us from the bottom of their hearts.

We found out there's about 6 or so artists who still regularly create doujinshi for this pairing. We happily bought their doujinshi and scanlated it. But then ... we became more personal with these artists. In fact, we even met them in person, and they were thrilled to see international fans of the pairing, and they were very embarrassed to hear we liked their doujinshi. In short, they were super duper nice, and we feel awfully guilty for scanlating their doujinshi without their permission and uploading it for free, when they sell it for money.

So what is the good scanlating etiquette here? Do we tell them we have loads of their doujinshi scanlated? Do we keep it a secret? I just feel so guilty for doing this behind their backs now. It started out as a way to promote the pairing and give something for the fans to read, but that was before we became actual friends with them...

I think this is mainly your personal problem and not the scanlaitors etiquette. It's something you'll need to decided but be fully aware what you risk.

I can't say i have experiences with anthers in same regards but I was in similar situations with other people. And all i can say for myself is that guilt is to much to bear so usually i told the truth.
And I think if you'll continue the friendship it'll get harder and harder to maintain it because the guilt will just get bigger.

There is not scanlators etiquette but some scanlaitors make it almost a rule to have authors permission. Some scanlaitors contacted the author once they said they're aware of scanlaitors (usually accompanied by some "negative" message"). Sometimes this turned in author giving permition, sometimes in another deal.
In general Japanese authors, (and really wast majority of authors in general) and even more so if its a doujin author, are really open to any sort of fan activity in regards of their work. More so if its a translation and not just fanwork.

So if i understood correctly you're not scanlaitng their doujinshis atm (BTW this post kinda made me interested to know who the parring is ^^), personally continue not doing so and tell them. Just because you've scanlated their works before you get to meet them it doesn't make you any less guilty of this, but it is something behind you and I think if you want to continue being friends this "black past" will have to be said (even it that means you'll break the friendship). But if the'll be able to accept this at least you'll have the chance to get official permission to continue your work, or maybe you can offer to make translation for them and they could sell English copies as well (for example through DLsite) but before you offer this I guess both of you will have think if this is what you as a scanlaitor want or not.

Virtually nobody of your readers would actually buy the doujinshi if it weren't for your scanlation. You're not hurting their business, so why would you feel guilty? If anything the artists should be proud that they have international fans thanks to you.

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I don't know of precedence about someone uploading another ones work and telling him in doujinshi or manga
but I know about it happening with Vocaloid music
someone made a youtube channel and worked to promote vocaloid producers music
with the artist permission or if the music was free to download (eg from soundcloud)
and he even did some PV with the artist approval
some of them were happy to have fans internationally while others didn't give permission , so i guess it depends on individuals

I've never heard of a doujinka who reacted positively to scanlations of her work. Just the opposite. The way it usually goes is that the doujinka notices scanlations, gets angry, and starts threatening to stop making doujinshi altogether if people don't stop reselling and scanning and reposting (with or without scanlations/translations) her work. A certain Naruto doujinka stands as the most well-known example. Her books are still being shared underground for fear that she'll spot one and quit.

It would be nice if at least one doujinka would be happy or at least forgiving/understanding of non-Japanese fans wanting to be able to read her Japanese-only books. If you've made friends with one, then she might be the first. Don't count on it, though. Most doujinka could write their books in English if they wanted to share them with English audiences. They don't need fan translations. I always assumed the reason they don't is because they're only allowed to sell a certain number of copies of each doujinshi in order to stay in the legal gray area, and they prefer those copies to go to people in their own country to be read in their own language. These are the same artists who freaked out when people were stealing their fanart pics off their websites and sharing them around the net. If they wanted these things shared, they'd be sharing them themselves. That's how I understand them, and I've yet to read an author's note or author's homepage that led me to believe otherwise.

So, as a scanlator, mum's the word. They know we're going to scanlate their books if we can nab a copy or find someone who owns a copy. They try to stop us by not allowing net auctions (which sell and ship outside Japan) and adding warnings against scanning books. They know that isn't stopping us, so all they can do is keep making a token effort and then ignoring the results. I honestly think that a doujinka faced with a scanlator would ask, "Why are you ruining it for me when you claim to be my fan? Those scanlation readers of yours are buying copies off ebay not off my site. I wouldn't ship outside Japan even if they wanted to buy from my site because I don't want my books in their hands. Couldn't you tell that by the note I put on the first/last page saying not to resale or reproduce the book? If I wanted you guys to see my doujinshi, I'd put them online myself. If I wanted you to be able to read them, I'd write them in English. Duh."

[Despite my pessimism I would love to see a doujinka who didn't react the way I predict. I'd be giddy if proven wrong. An English-friendly doujinka would be awesome to have, if only as proof that they aren't all xenophobic when it comes to sharing their fanworks outside Japan. I understand the legal tightrope they walk and why they'd want and even need to limit exposure to their fanworks, but this is the net we're talking about. No doujinka has ever been sued, let alone for what people in other countries did with online scans of their doujinshi. Since I don't know of any doujinka contacting a single scanlation group with a take-down request, I will continue to scanlate whatever I like content that they could contact me if they really hated it as much as they claim to. They don't even have to write in English if they don't feel like it. We translate their books so they know we could read any email they sent.]

from your example and from mine
I think it depends if the creator is approached first by someone asking for permission or if he found out it was done without his permission
the person in question told me that most he asked gave approval though there a percentage that refused
so most creators end finding their creation on the net without their approval
so most will "rightfully" end up enraged while a percentage will not care or most will not find out (maybe an academic study will be helpful in here)
I understand that some underground doujin authors don't want some of their barely legal or awkward creations disseminate beyond a circle of likeminded fans
( a similar argument was made against online readers making scanlations more noticeable to the industry )
maybe the last tokyo-ban have something to do with doujin works questionable contents coming in notice of politicians