Here's my humble attempt. Please don't laugh.

I've used parentheses inconsistently to indicate more litteral translations,
words added to make the English work, and sometimes what I thought the
root word was.

Maðr er nefndr Grímr kamban; hann byggði fyrstr manna Færeyjar.
A man was named Grímr kamban; he was the first man to live in the Faroes
(he dwelt first of the Færey men).

En á dögum Haralds ins hárfagra flýðu fyrir hans ofríki fjöldi manna;
But in the days of Harald the Fairhaired a multitude of men fled his tyranny
(the tyrranny of him, i.e. of Harald);

settusk sumir í Færeyjum ok byggðu þar, en sumir leituðu til annarra eyðilanda.
some settled/stayed in the Faroes and dwelt there, but some sought for another
uninhabited land.

Auðr in djúpauðga fór til Íslands
Auðr the deeply wealthy travelled (fara) to Iceland
[I'm cheating; I know she ended up in Iceland, from reading other history]

ok kom við Færeyjar
but went (koma) via (with/reaching to) the Faroes

ok gifti þar Ólöfu dóttur Þorsteins rauðs,
and gave [in marriage] there to Ólöf daughter of Þorstein the red,

[this has got to be wrong ... more likely would be that she gave her daughter
Ólöf in marriage to Þorstein the red ... but that's not what the grammar
seems to be telling me.]

ok er þaðan kominn inn mesti kynþáttr Færeyinga,
and from them (who/which/when from there) came the biggest lineage (kin-rope)
of (the) Færey-ians.

er þeir kalla Götuskeggja, er byggðu í Austrey.
which they call (the) Götuskeggja, who dwelt in Austrey.

--
Arlie

(Arlie Stephens arlie@...)