If you're thinking of going to Iceland, I was there for three weeks this September. The ring road is nice enough, but most of the interesting stuff is in the interior, which involves riding unmade roads. These vary from hard rock to gravel to black sand, potentially switching every hundred yards, depending on how long since the latest volcanic eruption in that area. The black sand is particularly annoying to ride over as you will sink in it and progress is very slow - you'll learn to love washboard as at least it gives you something solid to ride over. Get the widest tyres you can. I was on 700x45, and though I wished I'd had wider, I had an easier time than my friend who had narrower (35ish) tyres and a heavier bike, as I could float over some of the bits where he dug in. My bike - a Kinesis Tripster, which I'd thoroughly recommend - could have taken 50 mm tyres; it looks like the 520 will take at least that size, so make sure you fit them, and don't overpack.
There's no ferrry UK-Denmark anymore, but as mentioned upthread, if you get the ferry from there to Iceland you can stop off in the Faroe Islands. I didn't do this but it sounds like an excellent idea if you've got the time.
