valshamr - hawk's skin (or shape), in this case the skin with the
feathers on that he can put on to turn him into a hawk and fly.

örninn mátti eigi stöðva sik - the eagle couldn't stop (himself).

*mássti valsins - a typo for 'missti valsins' "lost the hawk"! 'missa'
takes a genitive object.

it fyrsta - first / to begin with.