What I remember from a course I took as an undergraduate is that they believe that the Norse colonizers of Iceland brought along their Celtic slave women. That would explain the DNA, and the fact that the language of Iceland is descended from Old Norse (not Gaelic).
I had an acquaintance who was from the Faroes, which was settled by the Norse, they considered themselves part Irish due to the Irish women the Norse brought with them. The silent ancient history of women in this world is a tale that is yet to be told through genetics.