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near Hveragerðisbær, Suðurland (Lýðveldið Ísland)
You start from the road to Nesjavellir on the top of the first hill and follow the jeep track up the hill and later the wooden sticks that mark the hiking path. You can follow the sticks more or less all the way. When you finally hit bottom again follow the single track north back to where you left the car.
Remember a spare tube ;)
More info about the route are available here (in Icelandic): http://www.or.is/media/PDF/Leid_1.pdf