Iceland in Tolkien's Work?

[Kath]

Of course, another similarity is that both lands were uninhabited, & there were no 'natives' to cause problems for the settlers (of course, that would apply equally to Numenor....)

Ah, well, that's not entirely true according to some of those who live there. Many people still believe in 'the little people', and have done for a long time. In fact the belief is so strong that when roads were built they made sure not to build them over where the little people lived for fear that if they did it would cause these legends to become angry with them.

So perhaps that would link Iceland more to the Shire as you could see the little people as being hobbits.