You must try highland lamb. Absolutely the favorite meat in Iceland. No hormones! Also, hangikjöt (smoked lamb) is a very traditional food in Iceland, served as a warm main dish or cold.
Svið is a burned sheep-head, a traditional speciality. It tastes good although some might be a bit put off looking at it while eating...
Rjúpa (ptarmigan) and hreindýr (reindeer) can be had in some places during early winter.
Photo: Leg of lamb
http://www.facts-about-iceland.com/files/SecretsofIceland2009.pdf
