I believe that this restaurant is now called Kanturinn. We stumbled upon it after a visit to the Blue Lagoon, and were pleasantly surprised. The food was very good. Three of us had the lamb burgers, which were delicous, and one of us had a Thai dish, which was also very good. Turns out the cook is Thai, so it's no surprise that there were several Thai dishes on the menu, and that they are all probably good. They also had a good selection of local beers. The server was very helpful, recommending a few other restaurants and bars in Reykjavik, and he also offered us a try of the fermented shark and Black Death.
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