I came across this while searching for something else in the forum and thought I’d add a few comments for clarity.
First, we are dealing here with the first stanza of “Kvæði af Ólafi Liljurós”, the Icelandic version of a ballad known all over Scandinavia, with origins in the Middle Ages. Wikipedia has an article about it under the name “Elveskud”.
Second, most native speakers would have more or less the same difficulties as Silver Biscuit in trying to analyse the grammar of these few lines. In the end, the translation is mostly correct and I only have minor niggles:
1. In the first line, as in the last, the word fram does not have the meaning ‘ahead’. Með björgum fram means ‘along the cliffs’, and undan björgunum fram means ‘from under the cliffs’.
2. The second line is translated correctly, in my opinion. The peculiar grammar is probably just poetic licence.
3. In the third line, hitti can very reasonably be interpreted as having the meaning ‘found’, especially given the age of the text.
4. As Silver Biscuit suggests in the edit, blíðan in the last line is an adjective that goes with byrinn. Dropping the word ‘ahead’ gives a good translation.
Versions of this song are now all over Youtube. At least one of them has an English translation in the comments.