Yesterday my current residence visa in my passport expired. I am now technically living illegally in The Land. I called Útlendingastofnun to ask about this peculiar situation and after a conversation that began in English but rambled into Icelandic (yay! I can understand enough of the language to talk to Immigration Ladies!), I discovered that they are absolutely unconcerned that I had yet to receive the letter from them saying I could get my new one at the copshop. That 4000 krónur it now costs to renew your visa doesn't seem to bring expedited service, and immigrants running around without documentation is not a problem, apparently.
So I'm living lawlessly, but with the approval of the immigration office.