Chill

Soaking sheep
There aren't many hot soaks that are as picturesque as that of Hrunalaug, Iceland. 

I've seen references (Snaeland & Sigurbjörnsdóttir, 2010) in which it was suggested that the hot spring of Hrunalaug may be originally intended as a sheep dip.

However since long discontinued (hopefully), the sheep troughs are now delightful hot springs. Whether there is no need for dips anymore or whether there are no sheep, the older structure now functions as a the changing shed, for the attached hot spring. This tub can hold about 3 persons (see below). 

Behind the shed is a larger and also hotter spring which is half carved out of the hillside. This tub can hold a lot more persons, I've seen photo's with nearly 10 persons crammed in here, but that does seem to be the upper limit.
Temperatures of both hot springs are said to be a delightful 37-38 C [1].

Whipped around
This being early March though, winds are whipping around the grassy hills that surround the village of Flúðir. 

Before or after this village, one can take a turn eastwards, onto gravel roads that loop to meet near the 19th century church of Hruni (source). 

Pass this church, then turn right (there's a small sign directing to Solheimar). This is before the gravel road heads up in the hills. 
Down this straight road for 300m and there's a small car park with a no-camping sign, on your left, just after a cattle grid / fence (see below).

Park here, cross the hillock on foot, the hillock providing some protection from the howling winds.

Out of the wind you will see the small shed with grass on the roof, with a pool in front. This shed can be used for changing, essentially keeping you clothes dry and keeping yourself out of the wind. At the southern end one can jump in the small pool but on a cold day as today, the slightly hotter pool carved in the hill at the back is the better choice.

On my visit, the waters were delicious, considering the near zero temperature outside temperature, a massive wind-chill factor and the need to walk bare-foot on iced snow to get to the hot spring behind the changing shed. 

Enjoying this hot spring just meters away from the shed, a soak lasts long in these conditions. 
Consider the choice: stay longer or get out walk through the cold to your now cold clothes? So I stay longer ....

Take-off?

Hrunalaug is easily rated as one of Iceland's best (source). The article adds:

'The little hut is convenient to change your clothes in (or well, just take them off - most people just bathe naked since there is no-one around you!), especially at winter time'.

Probably your best source of information especially concerning  the directions  (but don't worry, it's not so difficult) is an excellent photo blog which can be found at getoffthebeatenpath.

Interesting side stories include the more recent past of Hrunalaug hot spring. This website offers information (in Icelandic) that the spring has had it's ebbs and flows. Apparently after the Hekla volcano eruption of 1980 the spring flow stopped. Slowly the spring reappeared but colder. Only in 2000 after an earthquake the temperature and flow re-established itself.

Another interesting point is that it's also used for Baptism (source)!

Less encouraging is that I have seen that in times past the place has become a drop-off point on the party scene. I can certainly imagine the charm of a night time soak, howver the discussion on a German language forum, noticed that the revellers were less keen, the morning after in clearing their rubbish ... Hopefully,  such habits won't last ...

Here's a youtube impression of Hrunulaug:

 

Tourist trail
A soak in Hrunalaug is easily to combine with a visit to some of Iceland's most popular tourist sights. Less than 20 km's away from Flúðir one can visit both the Gullfoss waterfall as well as the mother of all geysers: Geysir. 

Gullfoss is a essentially a lot of water dropping 30m into a crevice over a 2 km wide drop. In winter, the waterfall is winter wonderland (see below).

Geysir is the site of what would be the original geyser, one of the very few Icelandic words that have made into the English language. Through the ages Geysir has had it's ups and downs, literally. However recent eruptions are infrequent, partially as the workings have become victim to tourist vandalism. Not to worry too much as just besides Geysir is Strokkur geyser which erupts 10-30m every few minutes (see below).

On a final note, Iceland is known for it's freedom to roam policy. When visiting the two above expect that entrance fees may well be required as this philosophy seems to be crumbling as the ever increasing influx of visitors is requiring more and more efforts to manage; therefore the need for cash. 
Looking further let's hope that tourist numbers will not spoil such great places as Hrunalaug!

Note:
Snaeland, J.G. & Þ. Sigurbjörnsdóttir (2010) Thermal pools in Iceland. Skrudda, Reykjavik, Iceland