Given Iceland is surrounded by the Northern North Atlantic Ocean,
I'd say Don't skimp on the rain gear, You may be wearing it Daily for 3 weeks .
Like I did on the western Irish Coast.
+1 on picking a strong Tent, One you can Put up in a Gale, (ie 30+ knot winds)

Hoop tents , that are not freestanding which can be but together flat on the ground

Way better than one that you have to try to put the fly on separately and Last.