> Dungalsgnípa er fundurinn var fyrir ofan

"Duncansby Head, which the battle [fought] was above", i.e. "above
which the battle was fought". Notice that 'fundur-inn' is nominative.
If it had been the compliment of the compound preposition 'fyrir
ofan', it would have to have been accusative: 'fund-inn'.

http://www.alanmoar.flyer.co.uk/Caithness/Duncansby/duncansby.htm
http://www.scottishradiance.com/light/duncan2.jpg

On higher ground a bit inland of the headland? Or on the clifftops
overlooking a stack of rock?

LN