Given the seminal importance of seamen in Icelandic culture (sorry...), it's not surprising that they have a festival for them here. Jo and I walked to the nearby harbor yesterday and wandered into a tent full of kids drawing and painting, along with some booths related to the fishing-industries (one had a couple of dead fish laying on it. Educational and smelly!). There was also an old school accordion band playing there, and even a few amusement rides placed outside!
Of course there is more to the festival than this, but that's all we've seen when passing by. Many restaurants have special menus for this, but the prices approach 80$ per person so that doesn't strike me as a great deal... Maybe I just haven't stayed here long enough.