My translation follows.  I will echo Grace's welcoming of any help....

Nú reiðist þessi frásögn af Þorkatli og hans mönnum en Guðmundur hafði áður nokkuð öðruvísa sagt.

Now  this account of Thorkatl  and his men  was-carried-about but Gudmund  had  somewhat other  otherwise  said.

 

Nú þótti þeim frændum Þórarins nokkuð ifanleg sjá saga og kölluðust eigi mundu trúnað á leggja raunarlaust og töldu þeir sér fé hálft við Þorkel.

Now it was thought (by) those relatives of Thorarin somewhat doubtful this account and said (they) would not give credence to (it) without-proof and they counted themselves half for Thorkel.     (Z. trúnaðr  3  - leggja trúnað á e-t, to give credence to)

 

En Þorkell þykist einn eiga og bað gera til skírslu að sið þeirra.

But Thorkell was thought not any and asked to be put to the test   (Z. skírsla -  gera skírslu til e-s, to put to the test)

 

Það var þá skírsla í það mund að ganga skyldi undir jarðarmen það er torfa var ristin úr velli.

That ordeal was then in that would (not sure where to put "skyldi") creep under partially detached sod that which turf was cut open from (the) ground.  (Z. jarðarmen – ganga undir -men, to creep under a sod partially detached from the earth)

 

Skyldu endarnir torfunnar vera fastir í vellinum en sá maður er skírsluna skyldi fram flytja skyldi þar ganga undir.

The ends of the turf should be firmly in the grounds and/but such a man is put-to-the-test should perform should there undergo.

 

Þorkell trefill grunar nokkuð hvort þannig mun farið hafa um líflát manna sem þeir Guðmundur höfðu sagt hið síðara sinni.

Thorkell Tatter suspects somewhat whether that way will have gone about people's loss-of-life as Gudmund had himself said earlier.

 

 

Ekki þóttust heiðnir menn minna eiga í ábyrgð þá er slíka hluti skyldi fremja en nú þykjast eiga kristnir menn þá er skírslur eru gervar.

It was not thought (by) heathen men (to) remind (to) have responsibility then is such position should practice but now it is thought (to) have Christian men then which ordeals were accomplished.

 

Þá varð sá skír er undir jarðarmen gekk ef torfan féll eigi á hann.

Then (it) happened that cleansed-from-guild (the person) who went under the detached-sod if the turf did not fall on him.

 

 

Þorkell gerði ráð við tvo menn að þeir skyldu sig láta á skilja um einnhvern hlut og vera þar nær staddir þá er skírslan væri frömd og koma við torfuna svo mjög að allir sæju að þeir felldu hana.

Thorkell made an agreement with two men that they should place themselves at division around some lot and be there near placed then when the ordeal would be (frömd?) and strike the turf so much that all would say that they made it fall.

 

Eftir þetta ræður sá til er skírsluna skyldi af höndum inna og jafnskjótt sem hann var kominn undir jarðarmenið hlaupast þessir menn að mót með vopnum sem til þess voru settir, mætast þeir hjá torfubugnum og liggja þar fallnir og fellur ofan jarðarmenið sem von var.

After this plans that to which the ordeal should of him perform and as soon as he was/had come under the turf these men attack each other with weapons as if that were (settir?), they meet-one-another near (torfubugnum = curved turf?) and lie there fallen and (cause to) fall down the turf as destroyed was.

 

Síðan hlaupa menn í millum þeirra og skilja þá.

Then men jump in the middle and then separate them.

 

Var það auðvelt því að þeir börðust með engum háska.

That was easy because they fought with no danger.

 

Þorkell trefill leitaði orðróms um skírsluna.

Thorkell Tatter tried-to-get a report concerning the ordeal.

 

Mæltu nú allir hans menn að vel mundi hlýtt hafa ef engir hefðu spillt.

All his men spoke now that well would have gotten if no-one had spoiled (it).

 

Síðan tók Þorkell lausafé allt en löndin leggjast upp á Hrappsstöðum.

Then Thorkell took all (his) movable-property but the land (that) lay up at Hrappsstad.