> Svo varðist (varðast) hann vel.
> Thus he defended-himself well.

Yes, "defended himself", but I'm fairly sure this is the past tense of
'verjast'. 3rd person past indicative of 'varðast' would be
'varðaðist', wouldn't it? I don't know if 'varða' is used in that
sense though with the reflexive suffix. No middle voice paradigm is
given here [ http://www.lexis.hi.is/beygingarlysing/so/vb/vard1a.html
]. Googling for 'varðaðist' I found just one (modern) example.

> Bergþóra kvaðst ekki mundu berja Hallgerði illyrðum um slíkt, kvað

það enga hefnd fyrir svo mikið mál.

> Bergþóra declared (that she) would not throw bad-words (ie abusive

language) Hallgerð about such, declared that nothing avenged
(vengeance was inadequate) for so great a matter


Accusative-and-infinitive construction, I think, with 'vera' "to be"
unstated: "declared that [to be] no vengeance for so great a matter"
(i.e. sharp words are not enough; this calls for action!).

það = the abusive language

hefnd = "vengeance", the feminine abstract noun, rather than the past
participle of 'hefna' (which would presumably have to be neuter if it
was to agree with 'það').

enga = feminine accusative to agree with 'hefnd'