Kristilew, consider posting on TripAdvisor's Iceland forum. Someone may have an idea of a work around for you. $657 seems excessive for one night's stay, even for Iceland.
I've actually done some more flight research and I think we can do it in one day without spending 10 hours layover or flying to London, if we drive to Raleigh and go from there. Delta actually has pretty good options at decent prices. JetBlue also flies from RDU but as of right now it is literally double the cost of Delta, which seems so odd to me.
What's really off-putting about the $657 for one room with roll away, is I looked on Booking dot com and can get two rooms (the hotel's recommendation for a party of 3) there on the same night, for a total of $712. Just in case we wondered if ABD marked up.
.Kristilew, when I booked Iceland directly with ABD, the Vacationista told me they would do a transfer from the hotel to the Blue Lagoon. I'd better follow up on that.
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Please report back! If you get confirmation that they will transfer you, I will have my TA go back with that info.
I can't believe it didn't occur to ABD that some families would prefer to take advantage of the afternoon flight options. Of which, once I started looking, there are many. It's one thing to fly overnight to Italy, where you actually are in the air for enough hours get a little bit of sleep. But for a 5 hour flight, it doesn't make as much sense. Given an hour (at least) to settle the cabin, and an hour on the other end for landing prep, the lights will only be out for 3 at the most.