Many players like to cite the Official Scrabble Players Dictionary to validate words they use when playing Bananagrams. But as discussed in the last post, the OSPD has serious flaws and may not be the best choice for a reference. The official Bananagrams rules say that "any available dictionary may be used" to decide whether words are acceptable. Some better dictionaries to use with Bananagrams are listed here.
As an alternative, when playing Bananagrams among friends, the group can decide how strict it is going to be about word acceptability. A strict reading of the rules would say that if a word is in the dictionary, it is acceptable, whether or not it is slang. In the groups that I play, we are pretty lax, and frequently we do not even have a dictionary on hand. When playing without a readily accessible dictionary, the validity of words is sometimes debated, but the de facto standard is one of the following (I'm not sure which): 1) The word is only considered a rotten banana if it is misspelt or clearly not a word. 2) The word is considered a rotten banana if most people think it is wrong. 3) The word is considered a rotten banana if the person who played it relents and agrees that it is wrong (or questionable).
Acknowledgments: My thanks to Chuck, who started an e-mail discussion with me which led to this post and a deeper consideration of dictionaries.