> lét hið dólglegasta og lét það engi sem vissi.

I think you're right about the first half, "behaved in the most
hostile manner" (an extremely hostile manner). I wasn't sure about
the second half, so I asked Eysteinn. He says that `það' here can
only be the object of `vissi'. He rearranged the sentence into more
normal word order thus: "Engi lét sem hann vissi þat" = "nobody acted
as if he (they) knew that", i.e. "everybody ignored it".

MM & HP: "Thjostolf stalked about brandishing his axe in a sinister
way, but no one paid any attention." CV has this quote under `láta'
"to make as if" [
http://lexicon.ff.cuni.cz/png/oi_cleasbyvigfusson/b0378.png ], but
with no translation.

Llama Nom