> Áttu þau Guðrún þar mikið traust.
> They, Gudrun (and he), had much help.
> They, Gudrun (and son) had much help there.
> They, Guðrún (and Ósvífr?) had there (from that quarter)
> much support.

My guess, since the rest of the 'they' doesn't really seem
to be well-determined by the context, is that <þau Guðrún>
refers generally to Guðrún and those immediately around and
associated with her -- more or less her immediate family,
but perhaps also including unrelated dependents. It
probably would include Ósvífr, since he was apparently also
living at Laugar.

> Síðan fer Gestur Oddleifsson á fund Hallsteins goða og
> gerði honum tvo kosti, að hann skyldi reka í brott þessa
> fjölkunnigu menn ella kvaðst hann mundu drepa þá "og er þó
> ofseinað."

> Then Gest Oddleifson went to meet Hallstein the priest and
> gave him two choices, that he should drive away these
> sorcery men or stated for himself he would kill them "and
> yet ( ofseinað?)."

> Afterwards Gest Oddleif’s son goes to a meeting with
> Chieftain Hallstein and gave him two choices, (one:) that
> he should drive these sorcerer people away or (two:) he
> would kill them “and (it) is still too late.”

> After-that Gestr Oddleifr’-son goes to a meeting of (ie to
> see) Hallstein goði (priest-chieftain) and gave him two
> choices, that he should drive away these people
> skilled-in-magic or he declared-of-himself (that he) would
> kill them “and (but)(it) is still too-late (see seina,
> Z1).”

I think that the last bit is to be understood as 'even
though it is over-late [to be doing so]', i.e., 'even though
it ought to have been done earlier'.

Such benevolence: usually when someone is given 'tvá kosti',
one of them is fatal to the *recipient*!

> Kotkell svarar: "Gera skal þér kost á því.
> Kotkell answers" "You shall give a choice concerning them.
> Kotkell answers, “You shall make a choice in it.
> Kotkell answers: “(I) shall grant a choice (make terms?)
> for you (þér is dative case) on that.

'Make terms', I think: '[I]'ll make you terms concerning
that'.

Brian