Here’s my translation

Alan

Það var eina nótt um vorið að Þórir mátti ei sofa. 
That was one night during the spring that Þórir could not sleep.

Hann gekk þá út og var regn mikið. 
He went then outside and (the) rain was great (heavy).

Hann heyrði jarm þangað er stíað var. 
He heard bleating thither where the lambs’-pen was.

Þórir gekk þangað og sá á réttargarðinum að þar lágu kið tvö bundin og lömb tvö en í rétt sátu konur tvær. 
Þórir went (on foot) thither and saw in the-yard-of-the-public-fold that there lay two kids bound and two lambs and in (the) public-fold sat two women.

Þær léku að hnettafli og var taflið allt steypt af silfri en gyllt allt hið rauða. 
They played at ‘hnefatafl’ (King´s-Table) and the ‘Tables’-piece (tafl, Z3) was completely cast of silver but (and) the red (pieces) completely gilded.

Þær brugðust við fast og urðu hræddar mjög. 
They turned sharply and became (were) very afraid.

Þórir fékk tekið þær og setti niður hjá sér og spurði því að þær legðust á fé hans. 
Þórir was-able-to-seize (fá + pp) them and set (them) down beside himself and asked for that that (ie why) they fell upon (ie like robbers, see leggjast á e-t, Z15) his property.

Þær buðu allt á hans vald. 
They proclaimed everything (to be) in his power.(ie that he was the boss)

Hann spurði hverjar þær væru. 
He asked who they were.

Það var önnur Kerling dóttir Styrkárs í Barmi en önnur kveðst vera dóttir Varða ofan úr Vörðufelli og nefndist hún flagðkona en hin hamhlaupa. 
That was (the) first Kerling daughter of Styrkárr in Barmr and the-other declared-herself to be (the) daughter of Varði down out-of Vörðufell (Cairn´s-Fell?) and she called-herself an ogress but (called) the-other (woman) a witch-who-travels-in-the-shape-of-an-animal

Þórir gerði þá sætt með þeim að þær hefðu sauði með sér en hann taflið og það er þar fylgdi en á tuglunum taflpungsins var gullbaugur settur steinum en annar silfurbaugur var í borðinu. 
Þórir made that (þá, fem acc sg article) agreement with them that they (the two women) would-have a sheep with them but (and) he the-‘Tables’-‘set’ and that which there accompanied (it) but (and) on the straps of the bag-for-the-pieces was a gold-ring set with stones but (and) another silver-ring (band) was in the-board.

Þetta allt tók Þórir og skildu við það. 
Þórir took all this and (they) parted with that.

Þá sætt hélt Frosta vel en Kerling illa.
Frosta held that (þá) settlement well but Kerling badly.

Með þeim Eyjólfi í Múla og Helga á Hjöllum var fjandskapur mikill um beiting og beittu Hjallamenn fyrir Eyjólfi bæði tún og eng.
Between them, Eyjólfr in Múli (Mull) and Helgi in Hjallar (Mountain-side-ledges), was a great enmity about (the) grazing and (the) people (men)-of-Hjallar grazed (beita absol. Z1) both home-meadow and meadow-land before (in advance of, in the face of?) Eyjólfr.

Það var einn veðurdag góðan að menn voru að heyverki í Múla að þeir sáu hvar maður reið sunnan yfir Þorskafjörð og að garði í Múla. 
That was on one fine day that people (men) were at hay-making in Múli (Mull) that they saw a person (man) rode from-the-south above Þorskafjörðr (Cod-Fjord) and to the yard in Múli (Mull).

En því var þessa við getið að þessi maður var öðruvís búinn en þeir menn er þar riðu hversdaglega. 
But (And) this was mentioned with that (ie in addition) that this person (man) was otherwise (differently) attired than (to) those people (men) who rode there every-day.

Hann hafði hjálm á höfði en skjöld á hlið gylltan. 
He had a helmet on (his) head but (and) a shield gilded on (the) side.

Hann reið í steindum söðli og hafði öxi rekna á öxl nær alnar fyrir munn. 
He rode in a stained (coloured) and had an inlaid axe on (his) shoulder (which was) nearly a cubit (in length) for (the) steel-edge (munnr, Z2)

Hann reið ákafa mikinn og var hesturinn mjög móður. 
He rode exceedingly fast (see mikill, Z5 and ákafi in gen as adj) and the horse was very worn-out.

Og er hesturinn kom í garðshliðið var hann staðþrotinn. 
And when the-horse came into the-gateway-of-the-yard he was quite-exhausted.

Þá hljóp maðurinn af baki og setti öxina í höfuð hestinum og var hann þegar dauður. 
Then the-person (man) leaped of (the-horse´s) back and set the-axe into (the) head of the-horse and he (ie the horse) was at-once dead.

Hann tók ekki af söðulinn og gekk heim eftir það. 
He did not take-off the-saddle and went (on foot) home after that.

Eyjólfur bóndi spurði hann að nafni. 
Farmer (Yeoman) Eyjólfr asked him for (his) name.

Hann kveðst Gunnar heita, austfirskur maður að ætt, en kveðst Þóri finna vilja.
He declared-himself to be-called Gunnarr, an east-firths (of Iceland) person (man) by extraction, but (and) declared-of-himself to want to meet Þórir.