I saw about the longest compound word I've ever seen in Icelandic, which was in the program notes at the Symphony, talking about how Steve Reich was once the principal tympanist at a filharmonic orchestra. In icelandic, Steve was was the 'pákuleika Fílharmóníuhjlómsveitarinnar í New York'. And for most people something like sinfóniuhljómsveit (symphony orchestra) is enough to wrap their brain around, let alone make it a possessive word and with a definite article.
There is a website for Icelandic sex toys and lingerie called Pen.is. Clever, eh? But it's also a play on words! 'Pen' in Icelandic also means 'coy'. A+ for you, Icelandic Penis website!
I've also been collecting Icelandic words that have originated in English slang, but are respelled phonetically (and often conjugated/declined accordingly) into the native language. Here are a few!
Smart (but with rolled R) =well-dressed, very proper
að Djamma =to jam (in a band)
Grammatical nuts will also enjoy the fun fact that while most people here say 'Facebook', using English pronunciation (and almost every Icelander is on Facebook), one can also say 'Fésbók', which is also literally 'face+book', and I sort of prefer the sound of 'fésbók'. After all, in the States I often called it 'Fa-ché-book', as if were some fancy Italian invention. And then there is also 'MySpaché.' But that's going off the deep end of pronunciation, really. There comes a point where I need to reel it in.