Looking at the result for the parties.
IP: Won back suburbia - even traditionally left wing Hafnarfjordur - and increased their margin in their strongholds (ie. getting 73,2% on the Vestmanna Islands). They also proved they are the only party capable of fielding lists everywhere (except the very small places where its strictly write-in your neighbour to safe yourself the hassle).
They had their second worst result in Reykjavik ever, but managed to hang on to the fourth seat - so bad, but not a disaster. All in all a good election, especially considering how unpopular the government is.
PP: Didn't really regain anything after their really bad 2010 election and local lists prevailed in many of their strongholds. Only success was Reykjavik - the party's traditional soft spot - which may come back to haunt them since most of the rural base is socially liberal. While populism, nationalism and a distrust of foreign capitalists (whether from Reykjavik or abroad
) is part of the party DNA, it doesn't seem likely that outright continental style right wing populism can co-exist with its social liberalism. It also highlights the question what - if anything - PP stands for. Euroscepticism, resource extraction, rural interests and some lip service to "Christian values" may not be enough to keep the party together in the long run.
BF: Running under a new label without the Best Party magic and Jon Gnarr meant a big loss in Reykjavik - also bigger than the polls predicted. Which is a shame because some really capable people lost their seats. Got into 7 councils with a voter share on 10-15% comparable to the national polls and seems to have establisheds themselves as a viable party. Also outside of Greater Reykjavik with representation in some smaller places like Akranes and Arborg.
SDA: Had marginal loses in the places they gained last time and got a thrashing in Hafnarfjordur, but that was more than made up for by Eggertssons huge win in the capital. Only problem for Arni Pall Arnasson is that the Mayor seat may give charismatic Eggertsson a platform for challenging his leadership.
Established themselves as the big left wing party on the municipal level, gaining seats in small places where LG is traditionally stronger.
LG: The party had an extraordinarily good election last time and it would have been impossible to keep the gains. Still, after lots of quarrelling between greens and true leftists they finished clearly behind SDA relegating them to the junior partner spot (and since the Peoples Alliance was bigger than the SDs in most of the postwar era, that's not a given for leftists in Iceland).
Only really good thing was that Dawn didn't get in anywhere and the Pirates didn't establish themselves outside Reykjavik, so maybe more leftists will vote LG next time to avoid wasting their vote.
Pirates: Didn't get aboard any councils outside of Reykjavik, which is logical since they don't have much to offer regarding the sort of local issues discussed in the municipalities.
Dawn: Proved that with a 6%+ threshold in even the biggest places in municipal elections and a de facto 5% threshold in national elections, there really isn't room for two left wing parties.
So all in all the party system established after the last Alting elections was confirmed, but with a new europhile splinter party from IP under way and a possible liberal/nationalist split in PP the Icelandic party system still hasn't settled on a "new normal" after the crash.