Just got back (almost - I'm typing this in the wee hours of the morning in an airport in the USA due to a canceled connecting flight).
I did find a decent guitar shop in Reykjavik -->
https://www.hljodfaerahusid.is/is but I can't pronounce it! Met a couple cool guys that work there and had a good talk with them. They carried a bunch of Taylor guitars (Taylor requires a substantial inventory in the shop if you're a dealer). Played a 12 fret 312 that was nice.
It's cool how you can make a friend very fast despite coming from different places/cultures when you both play guitar.
Iceland was so beautiful. We spent most of our time driving and hiking. We were blessed with a week of sunshine and no rain. We did have one very windy day that was pretty unreal. Didn't get to see the Northern Lights, but it was still a trip I'll remember forever.