I applied to Fulbright Spain two years ago... I felt like I was a competitive candidate. Solid language skills, application/experiences, GPA, but maybe my references were not that great. I volunteered in a university in Costa Rica and a professor there wrote it for me, but her English skills were a little weak....also a boss from a summer job teaching... since she hadn't known me for that long it might've been weak. Anyways, I made it to the second round (where you are accepted and then sent to Spain for further review, but about half these people are cut). So I guess I got to the bottom 26-30% but then was cut.
I am in a similar boat considering applying- although I have access to better teaching references now and have 2 full years of solid teaching experience (AmeriCorps and student teaching). The application was so much work I'm not sure if I want to go through the struggle just to get cut again. I may set my sights more on South Korea or a program in Thailand through my university where I have much better odds. I guess the odds now are just 13% of people will get accepted to the Spain program. If you think you are a really solid candidate, I think it's worth a try- but if there are other parts of the Spanish speaking world you wouldn't mind going to that might be a good bet!