You got through in the end! What's Yahoo playing at these days?

> Kári sagði að það var vorkunn (várkunn) að hann bæði (bjóða, 3p sg pret subj) sér liðs svo mörgu (margr) sem hann mundi svara eiga.
> Kári said that that was something-to-be-expected that he (would) invite to himself troops as much as (commensurate with what (?)) he would be-obliged-to answer (for)

Commensurate with the magnitude of the crime (the burning) which he (Flosi) would have to answer for.

> Þorgeir mælti: "Því betur er þeim fer öllum verr af."
> Þorgeir spoke: `For that (reason) (it is) better when (it) goes for them all worse, (ie when they all behave worse, see e-m ferr illa, impers under fara, Z10) from (this).

'því' here isn't "because", but serves to introduce the comparison: "to that extent" rather than "for that reason". We'd tend to put the elements the other way around in English: "The worse they all do, the better [it will be]."

> Mörður skipti þá skjótt skapi sínu og svo orðum og bað (biðja) af sér reiði og tók þegar við málinu.
> Mörð changed then quickly his condition of mind (attitude) and also (his) words and asked for (their) anger towards himself (to go) off (?) (ie, for their pardon (see biðja af sér reiði e-s, under reiði, Z1) and accepted at once the case.

I imagined it was more specifically "her anger" that causes him to change his tune, but I guess they're all angry... You literal interpretation is right, as far as I know: he asked for [her] anger [to go] off him / ...to be removed from him. We could paraphrase, "He asked her not to be angry with him."