Future space-based gravity wave experiments such as the Big Bang Observatory (BBO), with their excellent projected, one sigma angular resolution, will measure the luminosity distance to a large number of gravity wave (GW) sources to high precision, and the redshift of the single galaxies in the narrow solid angles towards the sources will provide the redshifts of the gravity wave sources. One sigma BBO beams contain the actual source only in 68 per cent cases; the beams that do not contain the source may contain a spurious single galaxy, leading to misidentification. To increase the probability of the source falling within the beam, larger beams have to be considered, decreasing the chances of finding single galaxies in the beams. Saini, Sethi and Sahni (2010) argued, largely analytically, that identifying even a small number of GW source galaxies furnishes a rough distance-redshift relation, which could be used to further resolve sources that have multiple objects in the angular beam. In this work we further develop this idea by introducing a self-calibrating iterative scheme which works in conjunction with Monte-Carlo simulations to determine the luminosity distance to GW sources with progressively greater accuracy. This iterative scheme allows one to determine the equation of state of dark energy to within an accuracy of a few percent for a gravity wave experiment possessing a beam width an order of magnitude larger than BBO (and therefore having a far poorer angular resolution). This is achieved with no prior information about the nature of dark energy from other data sets such as SN Ia, BAO, CMB etc. ; Comment: 12 pages, 10 figures. Expanded discussion, additional references. Main results unchanged. Matches published version