It's great living iceland, but you get really stir crazy if you don't leave at least once a year.
And in my opinion (and many a scholars), miđgarđ and middle earth are very similar. The words "middle earth" are translated s "miđgarđ" in lotr. And i don't want to sound like i'm braging or anything but i do think that Tolkien was greatly influenced by Miđgarđ and all that. At least in The Hobbit.
I think you'll understand the similartity (in my opinion) between Iceland and middle earth when you visit.
p.s. make sure you come in the summer!!
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pćling.
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