Here’s my translation

Alan

Búi kvað hana ráða skyldu.
Búi declared she (accusative) should decide.

Eftir um morguninn gekk Búi til leiks (I note the gen sg here so does this suggest a specific game within the overall “games”?) í Kollafjörð. Hann kom heldur síð og
Later during the-morning (cf eptir um várit, eptir, Z.iii.1) Búi walked to the game in Kollafjörðr. He came (arrived) rather late and

var tekið til leiksins. Hinn sama hafði hann búning, gyrt að sér slöngu sinni.
was taken (brought) to the-game (gen sg again, see previous query). He had the same (as everyone else?) (masc acc sg) apparel, (had) girt (pp)  himself with his sling (dat fem sg of slöngva; I know he is chasing Ólöf but this is a family friendly tale J).

Ólöf sat á palli og Örn stýrimaður á aðra hönd henni og töluðust þau við.
Ólöf sat on (the) dais and captain Örn on one (annarr, Z1) hand (side) of her and they spoke-with-one-another.

Búi gekk að palli og kippti upp þeim tveim er sátu á aðra hönd Ólöfu.
Búi walked to the dais and snatches up those two who sat on (the) other hand (side) of Ólöf.

Síðan settist hann niður og sat þar þann dag, gekk heim um kveldið í helli sinn.
After-that he sets-himself down and sat (remained, Z2) there that day, walked home during the-evening to his cave.

Svo breytti hann annan dag og hinn þriðja. Örn austmaður hélt hætti (háttr) sínum
Thus he conducted-himself (breyta, Z3) a second day and the third. Örn (the) Norwegian (lit: East-man) held his conduct (maintained his composure, stayed cool?).

en hvorgi (hvárgi) talaði svo við Ólöfu að eigi heyrði annar.
but neither-of-the-two (hvárgi) spoke such with Ólöf that (the) other (masc nom sg MnI spelling) did not hear. (not sure if this means the other could hear or not…too many negatives!)

7. kafli
Chapter 7

Nú er þar til að taka er Þorgerður húsfreyja var að Vatni. Hún kom í eldhús
Now (it) is to take (the story) there where Þorgerðr, wife, was at Vatn (dat sg). She came into (the) hall (lit: fire-house)

um dag. Þar lá Kolfinnur son hennar og rétti býfur helsti langar.
during (the) day. There lay Kolfinnr, her son, and (he) stretched-out (his) ) far-too (helzti) long legs (lit: clumsy-feet, see býfur, Z1)

Hún mælti: "Mikið má skilja," sagði hún, "til hvers menn eru fæddir í
She spoke: “Much (one) may discern,” said she, “to what (purpose, ie why) persons (men) are given-birth to (ie brought) into

heiminn og að hverju getið skal verða. Þeir sitja tveir menn í Kollafirði og
the-world (heimr, Z2) and for what (he) shall become (verða + pp)-begotten (geta, Z5) (ie why did I bother giving birth to such a great streak of misery) . They, two men, sit (tarry) in Kollafjörðr and

keppast um Ólöfu hina vænu og mörg karlmannleg brögð eru frá þeim sögð.
contend over Ólöf the fair and very many manly devices (tricks, seductions, guy´s chat-up-lines to impress?, acc neut pl of bragð) are from them said (recited).

Nú ganga þangað allir ungir menn til leika en þú ert sú vanmenna að þú liggur í
Now all young folk (men) go thither to (the) games but you are that worthless-person (ie that streak of misery or waste of space referred to above) that you lie in

eldgrófum til hrellingar þinni móður og væri betra að þú værir dauður en
(the) fire-pit to the anguish (fem sg gen) of your mother and (it) were better that you were dead than

vita slíka skömm í ætt sinni."
to know such shame in one´s-own family.”

Kolfinnur segir: "Áköf ertu nú móðir og mun brátt betur."
Kolfinnr says: “You-are vehement (fired-up, ákafr) now mother and (but) (it) will  soon (be) better.”

Þorgerður snýr á burt.
Þorgerðr turns away.

Litlu síðar rís Kolfinnur upp og gengur út og litast um, sér að ekki er framorðið.
A little later Kolfinnr rises up and walks out and looks about him (litast, this timeJ), sees that (it) is not late.

Kolfinnur var svo búinn að hann var í kollhettu og hafði kneppt
Kolfinnr was so arrayed that he was in a round-cap and had pressed

blöðum milli fóta sér. Hann hafði hökulbrækur og kálfskinnskó loðna á fótum.
with skirts (see note and link below) (dat pl of blað)between his legs. He had ‘cloak-breeches’ and hairy calf-skin-shoes on (his) feet.

From http://www.myspace.com/vikingclothing/blog/319822708

The 'coal-biter' Kolfiðr's humble outfit includes such a garment: it is said that he var í kolhettu ok hafði kneppt blöðum milli fóta sér 'wore a kolhetta and had tied its two laps between his legs'. Hjalmar Falk interprets this very rare term, in my opinion correctly, as indicating a round, close-fitting hood, devoid of the long 'tail' often associated with medieval hoods (Falk 1919, 96). Like that of the skauthetta, or skauthekla (see Helgi Guðmundsson 1967, 13–14), the head-piece also comprised a front and a back skirt, which, as Jóhannes Halldórsson also notes (Kjalnesinga saga 1959, 18 n. 1), is reminiscent of the kjafal described in Eiríks saga rauða (1935, 223).