> Skerry is given as a Rock which is submerged at high tide

Yes, another word is 'reef'.

> Bláserkur
> "White Shift" (or white shirt)

'blár' normally means "blue" or "dark/black" .

> Eftir um sumarið
> The following Summer

Yes.

> ef landið héti vel.
> if the country were well named (?subj)

Yes, past subjunctive.

> and beginning to wonder at the Reasons. For the names - Disappearing

or Vanishing Peak - disappeared into the Heavy Cloud perhaps - etc

I wondered about that. You could be right. I was thinking
topologically: could it be hidden to people approaching from a certain
angle or at certain distances due to the lie of the land or some
obstruction? But I've no idea really. You reason sounds more likely
actually, unless it was a very small peak...

LN