We really enjoyed our stay at the guesthouse Eyvindara in Egjilstadir, Iceland. We only spent a night there but it was very comfortable and enough space for 4.
This particular cabin has a small living area, kitchenette equipped with all for light to medium cooking and serving. The bedroom has a double bed and the living area has a futon that turns into a double bed. It fit our family of four very comfortably. Clean, nice staff, lovely breakfast. There are more cabins there, some larger and others smaller.
The town of Egjilstadir is the largest in the area. We had a flat tire there and found the people to be very nice and helpful and not practicing double pricing for tourists. A really nice stay and local experience. There was some construction going on in the reception area (building more rooms in the main building) but it looked like it was moving really fast and did not affect the guests. Definitely recommended.