I have seen a few maps of that lava flow terrain there and it does look amazing. Bringing back great memories reading your blog.
In a late 1990s report he wrote on potential new orienteering terrains in Victoria, Alex Tarr mentioned some lava flow terrain at Mount Eccles in the southwest (which I've been meaning to look at some time) where he commented that elites would do well to break 30 min/km there. From some of the stuff I've seen in Iceland I would believe it.
I also gather France has some spectacularly difficult old volcanic terrain in the Massif Central (France seems to have quite a wide variety of spectacularly difficult terrain).
As it happens I am familiar with Mt Eccles area as I grew up near there (closer to Mt Napier). Main issues for this area for orienteering is that it has a lot of bracken cover and underneath it is quite stoney - in one nearby area it is locally called 'the stoney rises'. It is a pity as there is a lot of contour detail but a lot of volcanic stones on the surface. Where there is no stones it is farmland without any trees. I also recall being at Mt Eccles a couple of years ago in summer and saw quite a few large snakes near the waterhole that occupies the former crater. Also saw quite a few koalas in the trees in the park.
I didn't realize Blair was in Iceland at roughly the same time as me (Aug 9-13). I could have challenged you to a race on this course:
http://tullingesk.se/kartarkiv/show_map.php?user=a... (I probably would have lost, didn't even finish the whole course due to lack of motivation.) Terrain was nice and mostly runnable. Pretty big cave to explore by the cairn near control 15/19 too.