I have copied Alan's idea of underlining things I have doubts about - as I did last week - it seems a good idea
 
Þjóstólfur gekk að og sá að hún var særð í andlitinu og mælti: "Hví ert þú
svo illa leikin?"
Thjostolf went to her and saw she was wounded in the face and asked " Why are you so badly wounded"

"Þorvaldur veldur því bóndi minn," sagði hún, "og stóðst þú mér þá fjarri ef
þér þætti nokkuð undir um mig."
"Thorvald  was the cause (of this) my husband " said she "and you were so far off - if you had thought  of me (þœtti from þykir)  (I think she is saying if her had been there it would not have happened)

"Eg vissi eigi," segir hann, "en þó skal eg þessa hefna."
"I knew (it) not" says he "but even so I shall avenge"

Síðan gekk hann á braut og til fjöru og hratt fram skipi sexæru og hafði í
hendi öxi mikla er hann átti, vafinskeftu. Hann stígur á skip og rær út í
Bjarneyjar.
Afterwards he went out and to the shore and shoved out a six-oar skiff and had in hand a great axe he owned (with) iron bound handle. He got aboard the skiff and rowed out to Bear Island
 
Og er hann kom þar voru allir menn rónir nema Þorvaldur og
förunautar hans. Hann var að hlaða skútuna en þeir báru á út, menn hans.
And when he came there everyone had  rowed away, except Thorvald and his followers. He was loading  the skiff, and they were carrying to him his men


Þjóstólfur kom að í því og hljóp upp á skútuna og hlóð með honum og mælti:
"Bæði ert þú að þessu lítilvirkur og óhagvirkur."
Thjostolf came to him and then jumped up on the skiff and helped with him and said "You are weak and  useless
(ó + hagr - unskilled) at this work.

Þorvaldur mælti: "Hyggst þú munu betur gera?"
Thorvald said "think you can do better"

"Það eitt munum við að hafast að eg mun betur gera en þú," segir Þjóstólfur,
"og er sú kona illa gift er þú átt og skyldu ykkrar samfarar skammar vera."
"that we can try whatever, I can do better than you" said Thjostolf "and the wife you had was unlucky (illa gift - there's that ill-given again)  and your life with her shall be brief

Þorvaldur þreif upp handsax eitt er var hjá honum og leggur til Þjóstólfs.
Thorvald takes a short sword that was near to him and lunges towards Thjostolf

Þjóstólfur hafði öxina á öxl sér og laust á mót og kom á hönd Þorvaldi og
brotnaði handleggurinn en saxið féll niður.
Thjostolf had the axe over his shoulder and struck a return blow and struck Thorvald's hand/forearm and broke it the sword fell to the ground
 
Síðan færði Þjóstólfur upp öxina
í annað sinn og hjó í höfuð Þorvaldi og hafði hann þegar bana.
Afterwards Thjostolf raised his axe again  and hit  Thorvald's head and he met his bane (death)

12. kafli
Chapter 12

Þá fóru þeir ofan, menn Þorvalds, með byrðarnar
Thorvalds men were coming over (?) bearing certain large boxes (? use of att. def. art.).
 
 Þjóstólfur tók til ráða skjótt.
Thjostolf took action quickly

 Höggur hann þá tveim höndum borð skútunnar og gekk sundur borðið um
tvö rúm, og hljóp í skip sitt.
He then struck using both hands (and of course his axe) at the side of the skiff and made a rent  as wide as the apace between two rowlocks (or rowers)
 
En á skútunni féll inn sær kolblár og sökk
hún niður með öllum farminum.
And into the skiff flowed/poured the coal black sea, and sunk her down with all her cargo
(ship's are always Feminine - needing the guidance of a Good Man's hand)
 
Þar sökk og niður lík Þorvalds og máttu
förunautar hans eigi sjá hversu hann var til ger en hitt vissu þeir að hann
var dauður.
And there sank down the body of Thorvald amd his men could not see how he was/had been killed but they knew he was dead
(it is the way the blood rushes into the sea from a broken skull)

Þjóstólfur reri inn á fjörðinn en þeir báðu hann illa fara og aldrei
þrífast.
Thjostolf rowed up into the fjord and they bade him an ill journey and no Thriving
 
Hann svaraði engu og reri inn á fjörðinn og þar til er hann kom
heim og brýndi upp skipinu og gekk heim og hafði uppi öxina og var hún
blóðug mjög.
He made no answer and rowed on  up the fjord and thence until he came home and beached the boat,
and went  home and took up the axe and it (neut) was very bloody
 
Thorvalds men must have been upset - how may they now get home - the boss is dead - the ship is sunk with the cargo - seems to me they are up THAT Creek without a paddle
I did not seem to do too badly last week unless any one knows differently
Kveðja
Patricia