http://flickr.com/photos/tiangotlost/490223003/
Since I personally have yet seen the film, Prof. Gorni described the scene to me as the following:
The main character gets the tattoo after his high school final exam. His buddies ask him what the chacaters mean. His answers "peace, love, bread" (yes, in this order!). When asked "why bread?", he explains that the tattooist had proposed "peace, love, freedom", but he just didn't like the shape of "freedom", and settled for "bread" instead, because it looked better.The correct translation for 愛和夢 is "love and dream" if they are read as one complete phrase.
Later in the movie, some girls ask him about the tattoo, and he gives the meaning as "peace, love, angel of death" (yes, in this order; no reference to bread).
Nowhere in the movie there is a clear indication that anybody was aware that anything specific was wrong with the tattoo. They only say, "luckily enough, nobody knows Japanese around here".