Here’s my translation

Alan

So, now, where were we?…

Melsnati hét þræll. 
A slave was-called Melsnati

Hann var mikill ok sterkr svá at hann hafði tólf karla afl til hvers sem hann gekk. 
He was big and strong such that he had (the) physical-strength of twelve men whatever he did (or whoever he confronted) (lit: whatever/whoever he went towards, ganga til e-s) (?).

Úlfr beiddi at Melsnati skyldi drepa annanhvárn þeira bræðra karlssona. 
Úlfr requested that Melsnati should kill one-or-the-other of those brothers, (the)-old-man’s (commoner’s)-sons.

Var nú leikit af kappi um daginn. 
(It, ie the sport) was now played with ardour during the-day.

Sló Melsnati knöttinn yfir höfuð Högna. 
Melsnati struck (ie propelled) the-ball over the-head of Högni.

Varð hann langt at elta hann. 
He (ie Högni) needed to pursue (verða at + inf) it (the ball, masc) a long-distance.

Högni sótti knöttinn ok bar ólatliga, en Úlfr henti knöttinn, ok snaraði til Sigmundar. 
Högni fetched the ball and carried (it) quickly, but Úlfr caught-in-hand the-ball, and threw (it) towards (flung it at, snara, Z4) Sigmundr.

Kom á kinnbeinit ok sprakk fyrir, ok varð þat mikit sár. 
(It) came on to the cheek-bone and (it, ie the cheek-bone) was broken (see springa fyrir), and that became (ie was) a great wound.

Sigmundr snaraði knettinum at Melsnata, en Úlfr hljóp fyrir ok náði knettinum ok snaraði at Högna. 
Sigmundr threw (flung) the-ball at Melsnati, but Úlfr jumped in-front (ie intervened) and got-hold-of the-ball and threw (flung) (it) at Högni.

Högni henti knöttinn. 
Högni caught-in-hand the-ball.

Melsnati hljóp þá at Sigmundi, ok rak báða knefana fyrir brjóst honum svá hann hopaði um tvö fet aptr. 
Melsnati ran then at Sigmundr and drove both fists (hnefi) into the front of his chest so (that) he retreated (hopa, Z2) back (aptr) about two paces (fet).

Úlfr sló til Sigmundar með knattdrepunni, en hann brá fyrir manni. 
Úlfr aimed-a-blow  at (slá til e-s) Sigmundr with the-ball-striker (bat, racquet, knattdrepa, CV), but (and) he (ie Sigmundr) moved-suddenly in-front-of (the) person (man, ie Úlfr) (?).

Brotnaði hausinn í þeim. 
The-skull (presumably MnI spelling of nom rather than acc?) was-broken in that-one (him, Úlfr or Sigmundr? Not clear: Úlfr’s skull is broken in the next action so perhaps Sigmundr is meant here).

Högni greip í hönd honum ok sleit af honum í axlarliðnum, ok sló á nasir Úlfi svá hann fell ok kom höfuðit á stein. 
Högni grabbed him (ie Úlfr) by (the) arm, and snapped (it) off him at the-shoulder-joint, and struck on (the) nostrils of Úlfr so (that) he fell and the (his)-head came on to a stone (rock).

Brotnaði hausinn ok varð þat hans bani.
The-skull was-broken and that became (ie was) his death.

Nú hlupu menn til vopna. 
Now folk (ie the king´s men) ran to (their) weapons.

Þá kom Sigrgarðr konungsson ok stóð fyrir þeim bræðrum. 
Then Sigrgarðr (th) king’s-son came and stood before (ie protected, intervened for) those brothers.

Var þá sagt til konungi. 
(It) was then said 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. 
Sigrgarðr brought (koma – dative) a horse under those old-man’s (commoner’s)-sons (ie had them loaded on a horse), and they made-their-way into the-forest. (New sentence, reads better, I think) In that (instant) (the) king came, 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 caused to make them outlawed, killable-with-impunity and liable-to-be-seized, wherever they became (ie were) found.

Fréttist nú ei til þeira lengi.
(It) was not heard of them (ie Sigmundr and Högni) for a long time.

2  Sigrgarðr bað föður sinn fá sér lén nökkut þat er hann mætti halda sik ok sína menn. 
2. Sigrgarðr asked his father to get for himself some royal-grant, that which he might maintain himself and his folk (men)

Konungr fekk honum einn kastala ríkan ok þrjú skip ef honum þætti skemmtan at fara af landi burt. 
(The) king got for him a certain rich castle and three ships if (it) should-seem (a) pleasure to him to journey away from land.

Sigrgarðr valdi sér unga menn ok fríða ok frækna, ok mjök eptir skaplindi sínu. 
Sigrgarðr chose (velja) for himself young folk (men) and handsome and brave, and greatly after his-own temperament (skaplyndi) (ie and who would best get on well with him).

En hann var svá fríðr maðr sýnum at engi kona geymdi sín fyrir honum.
But he was a person (man) so handsome in appearance (fair of face) that no woman took-care-of-herself (ie was able to control herself) before him.