Here’s my translation

Alan

Eftir þessa sýn sá þeir blóð á klæðum sínum, þat er þeir vissu eigi, hvaðan var komit. 
After this vision they saw that blood on their clothes, which they knew not, whence it was (had) come.

Um kveldit, er þeir kómu at landi, sögðu þeir mönnum þessi tíðendi. 
During the-evening, when they came to land (ie ashore), they said (related) to persons (men) these tidings.

Öllum þótti þessi atburðr undarligr. 
This incident seemed wonderful to all (everyone).

Þat var enn í Selárdal, at sást í kirkju á sönghúspöllum ok á gólfinu utar frá blóð þat, er menn vissu eigi, hvaðan at var komit. 
Yet that was in Selárdalr that, in a church on choir-steps and on the-floor farther-out from [the choir-steps], was-seen that blood, which persons (men) knew not, whence it was (had) come.

Öllum þótti þessi sýn undarlig, er sá. 
This vision seemed wonderful to all (everyone), who saw [it].

Oddleifr hét maðr Jónsson á Skálmarnesi í Breiðafirði. 
[There] was a person (man) called Oddleifr Jónn’s-son in Skálmarnes (Prong’s Ness?) in Breiðafjörðr.

Hann sá enn blóð á klæðum sínum einhvern dag, er hann var úti staddr. 
Yet he saw blood on his clothes some day, when he was outside-the house. (<vera úti staddr>, under <staddr>, Z1)

Hann undraðist ok vissi eigi, hvaðan at var komit. 
He wondered at [it] and knew not, whence it was (had) come.

Slíka sýn sá húskarl Oddleifs þar á Skálmarnesi ok vissi eigi, hvaðan þat blóð var at komit. 
[The] house-carle of Oddleifr saw this vision there in Skálmarnes and knew not, whence that blood was (had) happened (materialised)

Þorbjörn hét maðr. 
[There] was a person (man) called Þorbjörn.

Hann var Magnússon. 
He was Magnúss’s-son.

Hann bjó í Valþjófsdal í Önundarfirði. 
He dwelt in Valþjófsdalr (Valþjófr’s-dale, person´s name) in Önundarfjörðr (Önundr’s-Fjord, person´s name).

Hann gekk út um nótt ina næstu fyrir Ambrosiusmessu um vetrinn þann sama, er Hrafn var veginn. 
He went out during the night nearest before (immediately preceding?) St Ambrose’s-Mass during that same winter, that Hrafn was killed.

Ok er Þorbjörn var út kominn, sá hann í landsuðr í loftinu, hvar eldr fór ór landsuðri í vestr, en eftir eldinum sá hann mann ríða hvítum hesti. 
And when Þorbjörn was (had) come outside, he saw in  [the] south-east in the-sky, where a fire went out-of [the] south-east to [the] west, but (and) behind the-fire he saw a person (man) ride a white horse.

Hann hafði skjöld hvítarí ok hjálm á höfði. 
He had a white (I expect this is a typo for <hvítan>, masc accusative but I found other instances of  <hvítarí> in other googled texts, but not in any dictionary) shield and a helmet on [his] head.

Hann var gyrðr sverði ok hafði höggspjót mikit í hendi ok lagði spjótit fram milli eyrna hestinum. 
He was girt with sword and had a large halberd in hand and placed the lance (ie the halberd) forward between the ears of the-horse.

Hann sá, at spjótit tók lengra fram en hestrinn. 
He (ie Þorbjörn) saw, that the-lance reached further forward than the-horse.

Þar eftir sá hann mann ríða. 
There-behind he saw (another) person (man) ride.

Sá hafði rauðan hest ok hálflitan skjöld, hálfan rauðan, en hálfan hvítan. 
That-one (ie He) had a red horse and a twin-coloured shield, half red but (and) half white.

Sá hafði ok hjálm á höfði ok gyrðr sverði ok mikit spjót í hendi ok fór svá með sínu spjóti sem sá, er fyrr reið. 
That-one (ie He) had a helmet on [his] head and [was] girt with sword and a large lance in hand, and [he, the Red Knight] went thus with his lance as that-one (ie he, the White Knight), who rode before.

Þar eftir sá hann mann ríða inn þriðja. 
There-behind he saw (another) person (man), ride, the third.

Sá hafði brúnan hest ok dökkvan skjöld. 
That-one (ie He) had a brown (or possibly black, give that a brúnn is a black horse, Z) horse and dark shield.

Sá var gyrðr sverði ok mikit spjót í hendi ok bar þann veg sem inir fyrri. 
That-one was girt with sword and a large lance in hand and [he] carried [it] in that way (manner) as the former (men).

Hann hafði á höfði því líkast til at sjá sem byskupsmítr væri, þann veg litt sem kolsvört klæði, ok svá sýndist honum öll hans klæði, þau er hann hafði. 
He had (wore) on [his] head [something] most-resembling to that which was a bishop’s-mitre to look for (expect, <sja til e-s>, Z6, ie most-resembling in appearance what one would expect in a bishops´s mitre),  coloured (litr, adj, neut sg) in that way like coal-black clothes, and thus seemed to him (ie Þorbjorn) all his (ie the Black Knight’s) clothes, those which he had (wore).

Þessir menn ríða allir ór landsuðri ok vestr eftir loftinu því nær skjótt sem fugl flygi. 
All these persons (men) ride out-of [the] south-east and west across the-sky nearly [as] quick as a bird would-fly.