Here´s my translation. I hope it is of use to someone.
Kveðja Alan
Skarphéðinn gekk þá til Gríms bróður síns. Héldust þeir þá í hendur og tróðu (troða)
Skarphéðin walked then to Grím his brother. They held-each-other then by (their) hands and trod
eldinn. En er þeir komu í miðjan skálann þá féll Grímur dauður niður.
(through or on) the fire. But (And) when the came into (the) middle (of) the hall then Grím fell down dead.
Skarphéðinn gekk þá til enda hússins. Þá varð brestur mikill. Reið (ríða, Z3) þá ofan
Skarphéðin walked then to (the) end of the farmstead-buildings. Then occurred a great crash. Then flew-down
öll þekjan. Varð Skarphéðinn þá þar í millum og gaflhlaðsins (gen singular, so I think he was pinned between one gable end and þar “there” where he was, ie either the roof, the ground or the end-wall). Mátti hann þaðan hvergi hrærast.
all the thatch (roof). Skarphéðin became then (caught) between there and the gable-end. He could from there move-himself nowhere (not at all).
Þeir Flosi voru við eldana þar til er morgnað var mjög (mjök, Z1, much, greatly, when used with verbs as is the case here). Þá kom þar maður einn ríðandi að þeim.
They, Flosi (and co) were (stayed) by the fire until (it) was much become-morning (well and truly day). Then came there a certain person riding to them.
Flosi spurði þann (acc sg of sá, that-one, ie him) að nafni en hann nefndist Geirmundur og kveðst vera frændi
Flosi asked him for (his) name but (and) he named-himself Geirmund and declared-himself to be a kinsman
Sigfússona "þér hafið mikið stórvirki (if stórvirki is neut plural, see Z, then mikið must be neut as adverb, see mikill, z6) unnið (vinna)," segir hann.
of (the) Sigfús-sons ‘you have performed a greatly great-achievements,’ says he.
Flosi svarar: "Bæði munu menn þetta kalla stórvirki og illvirki (if storvirki is n pl, why is illvirki n sg, according to Z?). En þó má nú ekki að hafa. (see hafa e-t at engu, Z14)"
Flosi answers: ‘Men will call this both a great-achievements and ill-doings (crimes). But still (one) may do nothing (about it)’ (what’s done is done, see hafa e-t at, Z14)
"Hversu margt hefir hér fyrirmanna látist?" segir Geirmundur.
’How many here of people-of-quality have perished?’ says Guðmund.
Flosi svarar: "Hér hefir (I think singular agrees with Njáll because he is the grammatical subject, everyone else are additional, ie also) látist Njáll og Bergþóra og synir þeirra allir,
Flosi answers: Here has perished Njál and-also Bergþóra and all their sons,
Þórður Kárason og Kári Sölmundarson, Þórður leysingi. En þá vitum vér
Þórð Kári’s-son and Kári Sölmund’s-son, Þórð freedman. But then we know
ógjörla (úgörla = not exactly, see Z) um fleiri menn þá er oss eru ókunnari (note: comparative, ie more-unknown)."
not-exactly about more men, those who are more-unknown (less well known) to us.’
Geirmundur mælti: "Dauðan segir þú þann nú er vér höfum hjalað við í morgun."
Geirmund spoke: ‘You say (to be) dead that-one (he) who now we have chatted with this morning.’
"Hver er sá?" segir Flosi.
’Who is that-one (he)?’ says Flosi.
"Kára Sölmundarson (accusative so direct object) fundum við (1st person plural, nominative so subject) Bárður búi minn (nominative, so subject)," segir Geirmundur, "og fékk (fá)
’We, Barð my neighbour (and I), met with Kari Sölmund’s-son,’ says Geirmund, ‘and Barð gave
Bárður honum hest sinn og var brunnið af honum hárið og svo klæðin."
to him his horse and the hair and also the clothes were burned from him.’
"Hafði hann nokkuð vopna (vápn)?" segir Flosi.
’Did he have something (in the way) of weapons?’ says Flosi.
"Hafði hann sverðið Fjörsváfni," segir Geirmundur, "og var blánaður (past participle of blána) annar
’He had the sword ‘Fjörsváfna’ (Life’s-?, name of sword)’ says Geirmund, ‘and was (had) become-blue one
eggteinninn og sögðum við Bárður að dignað mundi hafa en hann svaraði því að
steeled-edged-of-the-sword and we, Barð (and I), said that (it, the edge) would have lost-(its)-temper but he gave-answer to that, that
hann skyldi herða (herða, Z1) í blóði Sigfússona eða annarra brennumanna."
he should (re)temper (it) in (the) blood of (the) Sigfús-sons or of (the) other burning-folk (incendiarists)
(He wants to resharpen his blade using the blood of his enemies)
Flosi mælti: "Hvað sagði hann til Skarphéðins?"
Flosi spoke: ‘What said he concerning Skarphéðin?’
Geirmundur svarar: "Á lífi sagði hann þá (accusative plural of sá) Grím báða þá er þeir skildu (past of skilja not skulu)en þó
Geirmund answers: ‘He said (declared) them, Grím (and) he, both in life (alive) when they parted but still
kvað hann þá nú mundu dauða."
he declared those now would (be) dead.’
Flosi mælti: "Sagt hefir þú oss þá sögu er oss mun eigi setugrið bjóða því
Flosi spoke: ‘You have related to us those statements (events, either Z1 or Z3) which will not offer to us settled?-peace because
að sá maður hefir nú á braut komist er næst gengur Gunnari að Hlíðarenda um
that person (man) has now made-his-way away who goes (approaches) nearest to Gunnar of Hlíðarendi in (concerning)
alla hluti. Skuluð þér það nú og hugsa Sigfússynir og aðrir vorir (vár) menn að
all things (in all respects, see hlutr, Z7). You shall now think-upon that, sons-of-Sigfús and our other people (men), that
svo mikið eftirmál mun hér verða um brennu þessa að margan mun það gera
such great a repercussion (after-matter, consequence as per MM&HP, or action on behalf of a person slain, as per Z) will here occur concerning this burning that that will make many (a man)
höfuðlausan en sumir munu ganga frá öllu fénu. Grunar mig nú það að engi
headless but (and) some will go from (be stripped of) all wealth. I suspect (impersonal construction, see gruna, Z3) that, that none
yðvar Sigfússona þori að sitja í búi sínu og er það rétt að vonum (ván, often when you see ‘o’ in Modern Icelandic spelling, look under ‘á’ in Zoega). Vil eg nú
of you sons-of-Sigfús (would) dare to sit (remain) in your farms and that is right in expectation (perfectly understandable) I will now
bjóða (see, Z3 = invite) yður öllum austur til mín og láta eitt ganga yfir oss alla."
invite (see bjóða, Z3) you all east to me (my place) and allow one (fate) to go over (befall, see ganga yfir, Z15) us all.’