Looking at the ADS-B track it appears that their original intention was to continue to destination, the track goes towards Chicago for a good two and a half hours following the occurrence, then abruptly turns west towards YWG over the middle of Hudson Bay, 3 hours from ORD and 2 from YWG. Next days' flight which landed in YWG with technicians had its track shifted towards the west already over Greenland, roughly where the incident happened. Apparently something happened en-route that made them change their mind.
The WX at Keflavik was 30+ winds gusting to ~40, well over their limited x-wind capability (20kts). From where they seem to have made the diversion decision, YWG was the closest suitable (not counting Churchill, which indeed is just a land asap option, a T7 cannot even turn on the runway).