Here’s my translation

Cheers

Alan

Síðan lætur konungur fá þeim (dative) hesta til reiðar en hann setur menn til að búa
After-that (the) king causes to get for them horses for riding but (and) he appoints (see setja, Z6) men to lay

um skip þeirra og annast varnað þann er þeir áttu.
up their ship and to take care of those wares which they had.


Konungur reið þá til Dyflinnar og þykja mönnum þetta mikil tíðindi er þar
(The) king rode then to Dublin and this seemed to men (persons) great tidings that (see er, Z5) there

var dótturson konungs í för með honum, þeirrar er þaðan var fyrir löngu
was the daughter’s-son (grandson) of (the) king in company (on the the journey) with him, (son) of her who was from-there long before (ago)

hertekin fimmtán vetra gömul. En þó brá fóstru Melkorku mest við þessi tíðindi,
captured (taken in war), fifteen winters old. But (it) nevertheless most startled (affected, see e-m bregð við e-t, bregða, Z9) the nurse (see Brian’s earlier comment) of Melkorka by this news

er þá lá í kör og sótti (soekja) bæði að stríð (nominative) og elli (nominative). En þó gekk hún þá staflaust á fund Ólafs.
who then lay in (her) sick-bed and affliction and old-age both attacked (her). But still she walked then with-out-a-walking-stick (staff) to a meeting with Ólafr.


Þá mælti konungur til Ólafs: "Hér er nú komin fóstra Melkorku og mun hún
Then (the) king spoke to Ólafr. ‘Here is (has) now come (the) nurse of Melkorka and she will

vilja hafa tíðindasögn af þér um hennar hag."
want to have a report from you about her situation (affairs).’


Ólafur tók við henni báðum höndum og setti kerlingu á kné sér og sagði að
Ólafr received her with both hands and set (the) old woman on his knee and said that

fóstra hennar sat í góðum kostum á Íslandi. Þá seldi Ólafur henni hnífinn og
her fosterling sat in good circumstances in Iceland. Then Ólafr gave her (the) knife and

beltið og kenndi (kenna) kerling (subject) gripina og varð grátfegin, kvað það bæði vera að
the-belt and (the) old-woman recognised the valuables and became tearfully-overjoyed, said that to be, both that

sonur Melkorku var skörulegur "enda á hann til þess varið (verja)."
Melkorka’s son was manly “indeed, it is his nature (genes)” (see verja, pp. n, Z5)


Var kerling hress þann vetur allan.
(The) old-woman was in-good-spirits all that winter.


Konungur var lítt í kyrrsæti því að þá var jafnan herskátt um Vesturlöndin.
(The) king was little sitting-at-rest (hardly had time for a breather) because then (it) was always in-a-state-of-war (exposed to raiding) across the Western-lands.

Rak konungur af sér þann vetur víkinga og úthlaupsmenn. Var Ólafur með sveit sína
(The) king drove from himself (repelled) that winter vikings and raiders. Ólafr was with his small-band-of-men

 á konungsskipi og þótti sú sveit (nominative) heldur úrig viðskiptis þeim er í móti voru.
on the king’s-ship and that small-band-of-men seemed rather viscious in dealings (hostile) to those who were opposed (to them)

 Konungur hafði þá tal við Ólaf og hans félaga og alla ráðagerð því að
(The) king then had talks with Ólafr and his companions and (on?) all decisions because

honum reyndist Ólafur bæði vitur og framgjarn í öllum mannraunum.
Ólafr proved to be both wise and eager in all trials-of-human-character (of courage).


En að áliðnum (dative, adj based on pp of verb líða + á, see Z6) vetri stefndi konungur þing og varð allfjölmennt. Konungur stóð upp og talaði.
But in late winter (the) king assembled a Thing and (it) was attended-by-many-people. (The) king stood up and talked.


Hann hóf svo mál sitt: "Það er yður kunnigt að hér kom sá maður í fyrra haust
He begain his speech so: ‘That is known to you that here came that man in the autumn before last

 er dótturson minn er en þó stórættaður í föðurkyn. Virðist mér Ólafur
 who is my daughter’s-son but evenso highly-born through (his) father’s-kin. Ólafr seems to me

svo mikill atgervimaður og skörungur að vér eigum eigi slíkra manna (gen pl) hér kost.
a great man-of-great-accomplishments and an outstanding-person such that we do not have here (his) match from such-like (similar) men (a choice of such men).

Nú vil eg bjóða honum konungdóm eftir minn dag því að Ólafur er betur
Now I want to offer him (the) kingdom after my day (death) because Ólafr is better

til yfirmanns fallinn (falla) en mínir synir."
suited (see falla, Z11) as (the) man-in-charge (ruler) than my sons.”