> Þeir stóðu upp en hann hopaði út undan.
> They stood up but he backed away out (?through the back door)

That's the idea: "he backed out (of the hall) and (ran) away".

> Og fór svo fram öll þau misseri.
> So it went for many seasons (?a year?)

Yes, a year. 'öll þau misseri' "all (i.e. both) those half-years" =
"all that year". One 'misseri' = 6 months. (The same division of
time appears in Old English as 'missere'.) There's a detailed article
on 'misseri' in Cleasby and Vigfússon.