Verified answer

This means "I'm at Vatnaskógur". Vatnaskógur is the name of a place. I know of one summer camp for kids that has this name, but there might be some other place with that name too.

I did use a translator (sorry, I don't speak Icelandic). I guess you would need to take the context into account to figure out the exact translation.

Looks like there are a few options for the first two words.

er: is/am

í: into/in/for/during/at

vatnaskógi: watershed

It means I am at Vatnaskógi.

Vatnaskógur is a forest and also a name for a christian camp for kids (:

i have no idea