Either I'm out of practice, or this passage is a bit harder to translate:

Melsnati hét þræll. 

A thrall was named Melsnati.

Hann var mikill ok sterkr svá at hann hafði tólf karla afl til hvers sem hann gekk. 

He was large and strong so that he had the stength of 12 men to any (?) as he went.

Úlfr beiddi at Melsnati skyldi drepa annanhvárn þeira bræðra karlssona. 

Ulfr asked that Melsnati should kill one of the two Karlson brothers.

Var nú leikit af kappi um daginn. 

It was now played with zeal during the day.

Sló Melsnati knöttinn yfir höfuð Högna. 

Melsnati struck the ball over Hogna's head.

Varð hann langt at elta hann. 

He was long at chasing him/it.

Högni sótti knöttinn ok bar ólatliga, en Úlfr henti knöttinn, ok snaraði til Sigmundar. 

Hogni pursued the ball and carried quickly, but Ulfr caught the ball, and quickly threw it at Sigmundr.

Kom á kinnbeinit ok sprakk fyrir, ok varð þat mikit sár. 

It landed on his upper jawbone and it was broken, and it was a large wound.

Sigmundr snaraði knettinum at Melsnata, en Úlfr hljóp fyrir ok náði knettinum ok snaraði at Högna. 

Sigmundr threw the ball at Melsnata, and/but Ulfr jumped above (it) and caught it and quickly threw it at Hogna.

Högni henti knöttinn. 

Hogni caught the ball.

Melsnati hljóp þá at Sigmundi, ok rak báða knefana fyrir brjóst honum svá hann hopaði um tvö fet aptr. 

Melsnati then leapt at Sigmundr, and drew both his knees over the chest of him so that he hopped on two feet after.

Úlfr sló til Sigmundar með knattdrepunni, en hann brá fyrir manni. 

Ulfr struck at Signmundr with a blow with the ball, and/but he moved over the man.

Brotnaði hausinn í þeim. 

His skull broke in them.

Högni greip í hönd honum ok sleit af honum í axlarliðnum, ok sló á nasir Úlfi svá hann fell ok kom höfuðit á stein. 

Hogni gras0ed his hand and broke off of him in the shoulder-joint, and hit Ulfr's nose so he fell and his head landed on a stone.

Brotnaði hausinn ok varð þat hans bani.

His skull broke and that was his death.

Nú hlupu menn til vopna. 

No men leapt to their weapons.

Þá kom Sigrgarðr konungsson ok stóð fyrir þeim bræðrum. 

Then Prince Sigrgardr arrive and stood before the brothers.

Var þá sagt til konungi. 

Then it was told to the King.

Sigrgarðr kom hesti undir þá karlssonu, ok komust þeir i skóginn í því konungr kom, ok var þá inn reiðasti, ok lét leita þeira. 

Sigrgardr arrived on a horse under (?) the man's sons, and the arrived in the forest (and) at that moment the king arrived, and he was then the most angry, and caused to search for them.

Fundust þeir ei. 

They were not found.

Lét konungr gjöra þá útlæga, dræpa ok tiltæka, hvar sem þeir yrði fundnir. 

The king causes them to be outlawed, killed, and procedures, whenever they were found.

Fréttist nú ei til þeira lengi.

Now nothing was reported about them (any) longer.

2  Sigrgarðr bað föður sinn fá sér lén nökkut þat er hann mætti halda sik ok sína menn. 

2  Sigrrardr asking his father to get him some royal grant, that which he could maintain himself and his men.

Konungr fekk honum einn kastala ríkan ok þrjú skip ef honum þætti skemmtan at fara af landi burt. 

The King got him a royal castle and three ships if he thought (it) an amusement to travel away from land.

Sigrgarðr valdi sér unga menn ok fríða ok frækna, ok mjök eptir skaplindi sínu. 

Sigrgardr himself ruled over young men, also fine and valiant, and very much after his (skaplindi?).

En hann var svá fríðr maðr sýnum at engi kona geymdi sín fyrir honum.

But he was such a handsome man in sight that no woman took care of herself before him.