Here’s my translation
Alan
Hann svarar: "Séð hefi eg það að eg ætla að tíðindum muni gegna."
He answers: „I have seen that which I expect will signify tidings (ie will be of importance, see gegna, Z3)
Helgi spyr hvað það væri.
Helgi asks what that was.
Hann kvaðst séð hafa menn eigi allfá "og hygg eg að vera munu utanhéraðsmenn."
He declared-of-himself to have seen persons (men) not totally-small-in-number “and I think that (it) will be persons-from-outside-the-district.”
Helgi mælti: "Hvar voru þeir er þú sást þá eða hvað höfðust þeir að eða
Helgi spoke: “Where were they when you saw them or what did they do (hafast, Z15) or
hugðir þú nokkuð að klæðabúnaði þeirra eða yfirlitum?"
did you attend to their apparel or personal-appearance?”
Hann svarar: "Ekki varð mér þetta svo mjög um felmt að eg hugleiddag eigi
He answers: “This did not befall me so greatly in-regard-to fright (ie I was not so frightened by this) that I did not pay attention
slíka hluti því að eg vissi að þú mundir eftir spyrja."
to such things because I knew you would ask about (them).”
Hann sagði og að þeir væru skammt frá selinu og þeir átu þar dagverð. Helgi
He said also that they were a short-distance from the-shieling and they ate breakfast (‘day-meal’) there. Helgi
spyr hvort þeir sætu í hvirfingi eða hver út frá öðrum
asks whether they sat in a circle or each out from the other(s) (ie extending in a straight line).
Hann kvað þá í hvirfingi sitja í söðlum.
He declared them to sit in a circle in (their) saddles.
Helgi mælti: "Seg mér nú frá yfirlitum þeirra. Vil eg vita ef eg megi nokkuð
Helgi spoke: “Tell me now about their personal-appearances. I want to know I am able to-some-extent
ráða að líkindum hvað manna þetta sé."
decide based-on probability (likelihood) what (group) of men this is.” (Let´s see if I can work out who these guys are, using Holmes’ methods)
Sveinninn mælti: "Þar sat maður í steindum söðli og í blárri kápu. Sá var
The-lad spoke: “A person (man) sat there in a painted (stained, steina) saddle and in a blue-black cloak. That-one (ie he) was
mikill og drengilegur, vikóttur og nokkuð tannber."
tall and valiant, bald-on-the-forehead-above-the-temples and somewhat with-prominent-teeth.”
Helgi segir: "Þenna mann kenni eg gerla að frásögn þinni. Þar hefir þú séð
Helgi says: “I fully know this person (man) from your description (act of relating). You have seen there
Þorgils Hölluson vestan úr Hörðadal. Eða hvað mun hann vilja oss kappinn?"
Þorgils Halla’s-son from-west out-of Hörðudalr. So what will he want with us, the-man-of-valour (this is referring to Þorgils, nominative)?”
Sveinninn mælti: "Þar næst sat maður í gylltum söðli. Sá var í
The lad spoke: “There nearest (to him) sat a person (man) in gilded saddle. That-one (he) was in
skarlatskyrtli rauðum og hafði gullhring á hendi og var hnýtt gullhlaði um
a red shirt-of-scarlet (cloth) and had a gold-ring on (his) arm and a gold-lace was fastened (by knot, pp of knýta) around
höfuð honum. Sá maður hafði gult hár og liðaðist allt á herðar niður. Hann
his head. That person (man) had yellow hair and (it) fell-in-curls completely down to (the) shoulders. He
var ljóslitaður og liður á nefi og nokkuð hafið upp framan nefið, eygður
was light-coloured and hook-nosed (lit: a joint was on the nose, see liðr, Z2) and the-nose had raised up somewhat from-the-front (he had a slightly upturned nose?), eyed
allvel, bláeygur og snareygur og nokkuð skoteygur, ennibreiður og fullur að vöngum.
very-well, blue-eyed and keen-eyed and somewhat restless-of-eye, broad-foreheaded, and full in the upper-cheeks (I think we´re still focussed on the face).
Hann hafði brúnaskurð á hári og hann var vel vaxinn um herðar og
He had a cutting-straight-across-the-brows with (his) hair and he was well developed across (the) shoulders and
þykkur undir hönd. Hann hafði allfagra hönd og sterklegan handlegg og
thick under arm (had firm lats (latissimus dorsi)?). He had a very-fair hand and strong forearm (note grammatically singular) and
allt var hans látbragð kurteislegt og því orði lýk eg á að eg hefi engan mann séð
his bearing was completely courteous (dignified) and I conclude on that word (note) that I have seen no person (man)
jafnvasklegan að öllu. Hann var og unglegur maður svo að honum var ekki grön vaxin.
of-equal-gallant-bearing in every respect. He was also a youthful person (man) such that the-hair-on-the-upper-lip was not grown.
Sýndist mér sem þrútinn mundi vera af trega."
(It) seemed to me like (he) would be swollen(masc sg form of pp) from grief.”