Iceland has had a very modest pandemic from the beginning. I have seen their last wave...but its really small in the grand scheme and has only featured a single death I believe. I would assume hospitalizations are also very low.
If the Ro of Delta is indeed near 6, then you would expect a fair amount of spread with a population that's about 70-75% fully vaccinated (I think including kids matters in the R calculation).
I think there has been some drop in effectiveness against delta in terms of infection, but haven't seen anything suggesting a drop in effectiveness against hospitalizations and death.