Here’s my translation

Kveðja

Alan

36. kafli - Af Kotkeli og Grímu
Chapter 36 – Of Kotkell and Gríma

Þessi tíðindi spyrjast víða og mælast illa fyrir. Þóttu það ólífismenn er
These tidings are-reported widely and are ill-spoken of. Those (grammatically sg) were-reckoned (þykkja) persons-deserving death who

slíka fjölkynngi frömdu (freyma) sem þau Kotkell höfðu þá lýst. Mikið þótti Guðrúnu
would-practice such sorcery as they, Kotkell (and family) had then shown (lýsa, Z2). (It) seemed (of) great (moment) to Guðrún (ie she took it much to heart, see þykkja, Z2)

að um líflát Þórðar og var hún þá eigi heil og mjög framað. Guðrún fæddi
concerning (the) death (life-loss) of Þórðr and she was then not hale (in a delicate condition, ie with child) and far advanced (with child, frama, Z1). Guðrún gave-birth-to

svein. Sá var vatni ausinn og kallaður Þórður.
a boy. That-one (ie he) was sprinkled with water and called Þórðr.

Í þenna tíma bjó Snorri goði að Helgafelli. Hann var frændi Ósvífurs og vin.
At this time, Snorri goði (priest-chieftain) lived at Helgafell. He was a kinsman of Ósvífr and a friend.

Áttu þau Guðrún þar mikið traust. Þangað fór Snorri goði að heimboði. Þá
They, Guðrún (and Ósvífr?) had there (from that quarter) much support. Thither Snorri goði (priest-chieftain) went at (their) invitation. Then

tjáði Guðrún þetta vandkvæði fyrir Snorra en hann kvaðst mundu veita þeim að
Guðrún showed (revealed, reported) this trouble to Snorri but (and) he declared-of-himself (that he) would help (veita, Z2) them in

málum þá er honum sýndist en bauð Guðrúnu barnfóstur til hugganar við hana.
(their) affairs when (it) seemed meet to him (ie when he thought fit, see sýnast, Z2) but (and) offered to Guðrún fostering of (her) child as a comfort for her.

Þetta þá Guðrún og kvaðst hans forsjá hlíta mundu. Þessi Þórður var kallaður
Guðrún accepted (þá is past tense of þiggja) this and declared-of-herself (that she) would trust (rely on, hlíta, Z1) his foresight. This (þessi = sjá, this, masc sg) Þórðr was called

köttur, faðir Stúfs skálds.
(the) cat, father of (the) skaldic-poet Stúfr.

Síðan fer Gestur Oddleifsson á fund Hallsteins goða og gerði honum tvo
After-that Gestr Oddleifr’-son goes to a meeting of (ie to see) Hallstein goði (priest-chieftain) and gave him two

kosti, að hann skyldi reka í brott þessa fjölkunnigu menn ella kvaðst hann
choices, that he should drive away these people skilled-in-magic or he declared-of-himself (that he)

mundu drepa þá "og er þó ofseinað."
would kill them “and (but)(it) is still too-late (see seina, Z1).”

Hallsteinn kaus (kjósa) skjótt og bað þau heldur í brott fara og nema hvergi staðar
Hallstein chose speedily and ordered them rather to go away and to take no pause (ie not stop) nowhere (anywhere)

fyrir vestan Dalaheiði og kvað réttara að þau væru drepin. Síðan fóru þau
west of Dalaheiðr and declared (it) more-right (more-just, comparitive of réttr) that they should-be killed. After-that they,

Kotkell í brott og höfðu eigi meira fé en stóðhross fjögur (fjórir) . Var hesturinn
Kotkell (and family) went away and had no more property than four stud-horses. The stallion (in this context) was

svartur. Hann var bæði mikill og vænn og reyndur að vígi. Ekki er getið um
black. He was both tall and beautiful and proven in battle (here: horse-fights). (It) is not recorded (ie mentioned in the sources, geta, Z.ii.2) about

ferð þeirra áður þau koma á Kambsnes til Þorleiks Höskuldssonar. Hann falar
their journey before they come to Kambsnes to Þorleikr Höskuldr’s-son. He demands-to-purchase

að þeim hrossin því að hann sá að það voru afreksgripir.
from them the-horses (neuter plural with suffixed definite article –in) because he saw that they (grammatically sg) were things-of-great-value.

Kotkell svarar: "Gera skal þér kost á því. Tak við hrossunum en fá mér
Kotkell answers: “(I) shall grant a choice (make terms?) for you  (þér is dative case) on that. Accept (imperative) the-horses but get (give) me

bústað nokkurn hér í nánd þér."
some dwelling-place here in proximity to you (in your neighbourhood).”

Þorleikur mælti: "Munu þá eigi heldur dýr hrossin því að eg hefi það spurt
Þorleikr spoke: “Will (they) not (be) rather expensive horses (plural), because I have that heard

að þér munuð eiga heldur sökótt hér í héraði?"
that you will have rather more quarrels here in (the) district)?”

Kotkell svarar: "Þetta muntu mæla til Laugamanna."
Kotkell answers: ‘This you-will (munt + þú) be-speaking of (referring to) (the) people-of-Laugar (genitive).”

Þorleikur kvað það satt vera.
Þorleikr declared this to be true (not conditional).