We just went to a very basic supermarket - almost like a really old bad K-mart but with food and produce, and there was this entire section with yarn - and some really nice wool yarn - some hand made Icelandic yarn. I picked some up yesterday at a factory and outlet in the town where we stayed overnight (Vik). Vik means "bay" and it's where the word Viking comes from. As you can see from one of the attached pics, I'm in love with the prices. Having a wonderful time!! We've driven for three days - leaving from Reykjavik and going south and east. We've hit the furthest spot east and have just headed north and west. Will be back in Reykjavik in four days and will spend another week there. Wish you were here!