Alright, I'm someone who doesn't really know much personally, but who has read a lot on this topic, and typically from what I've seen, it's very difficult to get interest in a self-published book in general. I know in America there are often biases against them because many are assumed to be of lower quality than those published via the normal means. That may not be fair, and a lot of high-quality books have been self-published, but if it's a situation where someone couldn't get published and then did it on their own, it generally takes a very high number of copies sold (thousands) to make an impression. I don't remember the average number sold off the top of my head for self-published books, but it's much less.
It's very rare to get picked up this way. Unfortunately, America isn't exactly big on picking up foreign things in general. That sucks and it's unfair and completely biased, but it's also true. Yes, there are a lot of foreign books out there on the market, but in general it would have to make a really good showing in the native language to even tempt an American publisher to do a translation.
So the odds are kind of stacked double high for you. If you printed in Icelandic through a traditional publisher, you'd still probably have to be a bestseller to be printed in English. Self-publishing only makes it even more difficult to get noticed and could potentially turn off publishers to later books.
So uhh....my mildly educated yet inexperienced advice would be this. First off, please don't be offended by this, but have you had others read through your work for you and offer critiques? Perhaps had people read through your query letter to find out if there is a problem with that? It could be that the book itself could still use some improvement, or that the book is great but the letter you're subbing with isn't effective enough.
I would in general advise against self-publishing if the goal is to use that as a springboard. It very, very rarely works, and most agent blogs have addressed this topic if you go check it out.
Your English is very good, and you might actually have a better chance submitting an English translation in general. You don't have to call it a translation, just sub it as a normal work. The thing is, you would have to show immaculate English to make it work, but I think you could do this. If you can't get it published in Icelandic, then work on your translation into English, then have a native speaker go through it and check the entire thing. I am sure that there are people on here who would be willing to help, even if it was just pieces at a time. I would, anyway. Then, I would consider just subbing straight to US agents once you have that done. I read once that an agent is typically impressed by a foreigner with a high command of English, so even if it's hard in general, it could also make you stand out as more impressive than average.
Of course, more experienced people can offer better advice, but those are my two cents.