Here’s my translation

Alan

Þegar er þessi sætt var handsöluð, fór Þorvaldr í brott með skyndingi, ok er Þorvaldr var skammt í brott farinn, þá dreif mikit lið at Hrafni, bæði Seldælir ok margir aðrir. 
As-soon-as this agreement was shaken-hands-on, Þorvaldr journeyed away with haste, and when Þorvaldr was (had) a-short-distance journeyed away, then a great host thronged (<drífa>, Z2) to Hrafn, both [the] Seldælir-clan (Selárdalr-folk) and many others.

Þeir váru margir vinir Hrafns, er mæltu, at þá skyldi gera eftir Þorvaldi ok drepa hann, svá berr sem hann gerðist í fjörráðum við Hrafn, er hann vildi brenna hann inni. 
They were many friends of Hrafn, who spoke, that then (one, ie Hrafn) should send for (<göra eptir e-m>, Z13) Þorvaldr  and kill him, as open (undisguised) as he became in [the] plottings-against-Hrafn´s life, when he (Þorvaldr) wanted to burn him (Hrafn) inside.

En þat sýndist oft, at Hrafn var ógrimmr maðr ok hann vildi heldr deyja fyrir tryggðar sakir en fyrir ótryggðar. 
But (And) that was-shown often, that Hrafn was a humane person and he would-want rather to die for reasons of (ie because of) [his] faith than for a lack-of-faith.

Nú vildi hann eigi gera eftir þeim Þorvaldi né drepa hann, svá sem hann átti kost, ef hann vildi, því at hann vildi eigi vinna þat til fára vetra virðingar, sem oft kunnu manna ráð verða, heldr vildi Hrafn hafa svívirðing af mönnum í orðlagi fyrir guðs sakir ok hætta svá lífi sínu til eilífrar miskunnar almáttigs guðs. 
Now he wanted no to send for that-one, Þorvaldr (or could be <those, Þorvaldr and co.>) nor to kill him, such as he had [the] opportunity, if he wanted, because he wanted not to do that for [the] esteem of a few winters (ie short-term glory), as often [the] counsels of persons (men) were-able (<kunnu>, 3^rd person pl, past tense of <kunna> + inf, Z10) to happen, rather Hrafn would want to have (ie wear) [the] disgrace of persons (men) in [their] talk, for God’s sake and so to trust his life to the everlasting mercy of almighty God.

Fyrir þessa tryggð Hrafns ámæltu honum margir menn, fyrir þat, er hann hafði látit Þorvald undan ganga, svá sem Guðmundr skáld Galtason segir Guðrúnu, systur Hrafns, þá er hon spurði, hvat hann heyrði rætt um málaferli þeira Hrafns. 
For this faith of Hrafn’s many persons blamed him, for that, that (ie because) he had let (allowed) Þorvaldr go away (escape), such as Guðmundr [the] scaldic-poet, Galti’s-son says to Guðrún, sister of Hrafn, when she asked, what he heard spoken concerning [the] lawsuits of them, Hrafn [and Þorvaldr].

Hann sagði ok kvað vísu:
He said and recited a verse:

[Option A]
   Heyrik Hrafni fjarða
Hear-I - Hrafn - of [the] fjords

   hyrtælendr ámæla,
[The] generous-men (Lex. Poet., lit: fire (gold)-enticed-ones?, ‘gold-lovers’?) blame

   þjóð es til lymsk á láði,
People exist, cunning on land,

   línspöng, of atgöngu.
woman (Lex. Poet., lit: linen-spangled-[one]), - over (ie for) [the] attack.

   Raun mun segja sína
His experience will say  

   seimhrjóðandi góða:
[The] generous man (Lex. Poet., lit: gold-unloader (distributor)) - good

   Vígs es Ullr at öllu
of battle - is Ullr Ullr (Æsir god of archery, presumably here = Hrafn based on MnI translation) in everything

   eitrþvengs fyrirleitinn.
circumspect about [the] arrow/spear (? Lex. Poet., lit: snake (poison-thong (strap)= of battle)

[Option B]
   Heyrik fjarða hyrtælendr ámæla Hrafni of atgöngu.  Þjóð es til lymsk á láði, línspöng.    Seimhrjóðandi mun segja sína góða raun: Vígs eitrþvengs Ullr es at öllu fyrirleitinn
I-hear [the] generous-men (Lex. Poet., lit: fire-enticed-ones?, ‘gold-lovers’?) of [the] fjords blame Hrafn over (for) [the] attack. People exist, cunning on land, woman (Lex. Poet., lit: linen-spangled-[one]). [The] generous man (Lex Poet, lit: gold-unloader (distributor)) will say from his good experience: Ullr (Æsir god of archery) is completely (lit: in everything) circumspect about [the] arrow/spear (? Lex. Poet. lit: snake (poison-thong (strap)= of battle).

[Option C]
   Eg heyri menn ámæla Hrarfni fyrir atgönguna. Fólkið á jörðinni er mjög undirförult, kona. Eg mun segja frá minni góðu reynslu: Hrafn er að öllu leyti gætinn.
I hear people (men) blame Hrafn for the-attack. The-folk on the ground are very disingenuous, woman. I will say from my good experience: Hrafn is in every respect cautious.

Þá er Þorvaldr kom í Ísafjörð, þá sagði hann allt annat um fundi þeira ok hver sætt verit hafði en var.    
When Þorvaldr came to Ísafjörðr, then he said ‘all different than was’ (ie he told complete porkies) about their meeting (confrontation) and what agreement had been (reached, ie what the terms of the settlement were).

Of sumarit eftir riðu þeir Hrafn ok Þorvaldr með miklu fjölmenni báðir til alþingis. 
In the-summer after, they, Hrafn and Þorvaldr both rode with a great many-people to [the] Althing.

Á þingi var kníat mál þeira Þorvalds ok Hrafns. 
At [the] assembly was debated [the] case of them, Þorvaldr and Hrafn.

Váru í fyrstu öll vitni borin í hag Hrafni, svá sem málaefni váru til. 
Firstly, all testimonies to the advantage of Hrafn were testified (given), such as [the] circumstances-and-nature-of-the-case existed.

En er Þorvaldr knokaði sína menn til ljúgvitna ok eftirmælis við sik, þá drógust þeir í málinu ok mæltu þá eftir Þorvaldi allir nema einn maðr. 
But (And) when Þorvaldr thumped (used physical force on) his people (men) for the purpose of false-testimony and compliance with him (Þorvaldr), then they drew-themselves into the-case and took the part of (lit: spoke behind) Þorvaldr, all except one person (man).

Sá hét Vermundr. 
That-one (ie he) was-called Vermundr.

Hann var sonr Þórðar Halldórssonar. 
He was [the] son of Þórðr, Halldórr’s-son

Hann bar öll vitni eftir því, sem Hrafnsmenn báru ok verit hafði. 
He testified (gave) all testimony behind (ie in line with) that, which Hrafn’s-people (men) testified and [which] had been (ie the truth)

Þar varð ekki gert um mál þeira Hrafns ok Þorvalds, því at Þorvaldr helt ekki þat, er þeir höfðu á sætzt sín í milli.
There (it) became not judged concerning their case, Hrafn’s and Þorvaldr’s because Þorvaldr observed not (ie disregarded) that, which they had come-to-agreement on between themselves.