Tolkiens great interest in Nordic Mythology is a fact and as Rune said, Middle Earth is a direct translation of Midgård.
"Gandalf the dwarf" was a character is the Icelandic (sp?) tale Snorres Edda if I'm not mistaken.
You could see this as copying others work, but I prefer the look at it as a way of connecting his work with old mythologies and create a foundation for a new mythology =) Many of the early texts he wrote is based on old celtic myths which through the years have been rewritten and edited to his own world (the notes in BoLT give hints of these connections to ancient english history).
All I wanted to say is that I agree with Rune Son of Bjarne

thanks for your time...
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Three switched witches watch three Swatch watch switches.
Which switched witch watch which Swatch watch switch?
He who breaks a thing to find out what it is has left the path of wisdom
~Lurker...