Here´s my translation

Kveðja

Alan

Nú reiðist þessi frásögn af Þorkatli og hans mönnum en Guðmundur hafði áður
Now this narrative (account) of Þorkell’s and his men was-spread-abroad (passive of reiða, Z5) but Guðmundr had before (ie already)

nokkuð öðruvísa sagt. Nú þótti þeim frændum Þórarins nokkuð ifanleg (efanligr) sjá saga
said somewhat otherwise (ie a different version of events). Now this story seemed to those kinsmen of Þórarinn somewhat doubtful (‘iffy’)

og kölluðust (kallast) eigi mundu trúnað (noun) á leggja raunarlaust og töldu (telja) þeir sér fé hálft
and they said of themselves (that they) would not place (leggja á) trust in (it) without-proof and they claimed (see telja sér e-t, Z3) for themselves half the property

við Þorkel. En Þorkell þykist (þykkjast) einn eiga og bað gera til skírslu að sið þeirra.
with Þorkell (ie half for Þorkell, half for them). But Þorkell bethought-himself alone to-have-a-right (to it) and asked to put (it)-to-the-ordeal (test) after (ie in accordance with) their custom.

Það var þá skírsla í það mund (noun) að ganga skyldi undir jarðarmen það er
That was then (the) test at that time that (one) should creep under a sod-of-earth (see under jarðamen, Z1, for expression), that which

torfa var ristin úr velli. Skyldu endarnir torfunnar vera fastir í vellinum
from (the) turf was cut out-of (the) ground. The ends of the turf (sod) should be sticking-fast in the-ground

en sá maður er skírsluna skyldi fram flytja skyldi þar ganga undir. Þorkell
but that man who should undertake (undergo, flytja fram?) the ordeal should creep under there (literally under-go!). Þorkell

trefill grunar nokkuð hvort þannig mun farið hafa um líflát manna sem þeir
Rag doubted somewhat whether (it) will have gone thus concerning (the) death(s) of people as they

Guðmundur höfðu sagt hið síðara sinni.
(he and ) Guðmundr had said the latter time (most recently?) .


Ekki þóttust (þykkjast) heiðnir menn (nominate = subject) minna eiga í ábyrgð þá (pron agrees with heiðnir menn) er slíka hluti skyldi fremja
Heathen people bethought-themselves not less to have responsibility, those who should practice (fremja) such things

en nú þykjast eiga kristnir menn þá er skírslur eru gervar.
than  now(adays) those Christian people who are put to ordeals (tests) bethink-themselves to have.

Þá varð sá skír (skíra, verb) er undir jarðarmen gekk ef torfan féll (falla) eigi á hann.
Then that one (ie he) who crept under (the) sod was purified (skíra) if the turf (sod) did not fall on him.


Þorkell gerði ráð við tvo menn að þeir skyldu sig láta á skilja um einnhvern
Þorkell devised a plan with two men that they should cause themselves disagree (?) about some

hlut og vera þar nær staddir þá er skírslan væri frömd (pp of fremja) og koma við torfuna
thing and (but) be situated (placed) near there when the ordeal (test) was performed (fremja) and to come against (ie knock) the turf (sod) (ie accidentally on purpose)

svo mjög að allir sæju að þeir felldu (fella) hana. Eftir þetta ræður (ráða) sá til er
so much  (ie just enough) that everyone would-see that they made it fall (fella). After this, that-one (ie he) sets about (it) (see ráða til, Z16), who

skírsluna skyldi af höndum inna og jafnskjótt sem hann var kominn undir
should perform the-ordeal (test) on behalf (of everyone?) and as soon as he was (had) come under

jarðarmenið hlaupast þessir menn að mót með vopnum sem til þess voru settir,
the-sod, these men attackagainst each other with weapons as (they) were appointed for that,

mætast (moetast) þeir hjá torfubugnum (torfa + bugr) og liggja þar fallnir og fellur ofan jarðarmenið
they met-each-other by the-turf-bow (turf-arch?) and lie there fallen and the-sod falls down

sem von (ván) var. Síðan hlaupa menn í millum þeirra og skilja þá. Var það auðvelt (auðveldr)
as was (the) expectation. After-that men run between them and separate them. That was made-easy (ie easily done)

því að þeir börðust með engum háska. Þorkell trefill leitaði orðróms um
because they fought with no peril (ie they were not in earnest). Þorkell Rag sought public-opinion (verdict) about

skírsluna. Mæltu nú allir hans menn að vel mundi hlýtt (hlýða?) hafa ef engir hefðu
the-ordeal (test). All his men now spoke that (he) would have done (hlýða, Z3?) well if none had

spillt. Síðan tók Þorkell lausafé allt en löndin (plural) leggjast upp á Hrappsstöðum.
spoiled (it). After-that Þorkell took (received) all (the) loose (ie moveable)-property (but) the lands passed-out-of-use (, became derelict? see leggjast, Z15) upp at Hrappstaðir.