Hi Rudds,
I highly recommend Vestmannaeyjar. It is an island just off the south coast. Good airport, and excellent scenery. Small enough to walk all around. The volcano is facinating. The whole story of the eruption and near closure of the harbour, in the early 1970's, is well documented in an older National Geographic magazine.
From there Reykjavik would be about a half hour flight, it's a great place too...
Have fun, fly safe...
Pilot DAR