I'm in Asuncion again at the moment, but I'm leaving soon for Brazil.
I got my residency visa here now, wich is quite easy to obtain and takes about 3-4 months but you can do all the paperwork in about 1-2 weeks and leave the country and come back when it's ready. The time for obtaining the papers in your home country (police check, birth certificate, etc) is not included in the 3 months.
I used a English speaking lawyer wich I can recommend, he charged me $800 for his services. You can in theory do it all by yourself but it will take longer and is more stressfull.
I think in order to get the secondary citizenship you have to go thru a similar process as you didi for obtaining the residency visa but I'm not sure, the lawyer can you inform you better
This forum is a good source of information for expats living in Paraguay: http://www.expat-blog.com/forum/viewforum.php?id=522
The lawyer I mentioned post in this foum under JFinestra.
It seems that there are more foreigners here now than in 2010 but not that much. Prices have gone up quite a bit since the guarani is getting stronger against the dollar and Euro And it's still very hot here for most of the year.
I haven't been grinding a lot here because I've been busy with the visa, buying a car here and some other stuff. As far as I know, there isn't much of a poker community as there is in BA, Brazil or Medellin. I don't know of any foreign grinders here.