Why did Gunnar turn back?

This was actually the subject of a poem by a very famous Icelandic poet Jónas Hallgrímsson. You can find the original poem and an English translation here. You should really read the whole thing since it is quite good, but this is probably the most relevant part to your question (copied from the above site):

Handsome and strong, his halberd at his side,

Gunnar is leaving Hlíðarendi's hall;

beside him, girt with grey-blue sword, astride

a blood-red stallion, sitting staunch and tall

and tied to Gunnar with intense devotion,

Kolskeggur rides, a man admired by all.

Thus, in a comity of mute emotion,

the brothers guide their horses from the farm:

Kolskeggur gazes out across the ocean,

while Gunnar, glancing backward, finds the charm

of home so master him, he does not care

that savage foes have sworn to do him harm:

"Never before has Iceland seemed so fair,

the fields so white, the roses in such glory,

such crowds of sheep and cattle everywhere!

Here will I live, here die — in youth, or hoary

helpless old age — as God decrees. Good-bye,

brother and friend." Thus Gunnar's gallant story.

I've heard this section in particular being talked about by Icelandic expats living the United States, and it really encapsulates in a lot of ways how Icelanders feel about our country.

I've only read a few serious scholarly articles about the sagas, and I don't know how up to date this is, but I've read that they were important in forming a national identity for Icelanders separate from Norway (like this article suggests). I've also read another article which I'm having difficulty tracking down which tracked the usage of the identifiers the characters or narrators within the sagas used for different characters depending on where those characters were located, and found that they were identified most often as Icelanders (íslendingr) when they were in Norway (keep in mind that the majority of settlers came from Norway, and the languages at this time were pretty much identical).

I don't think anyone is suggesting that there was some group of people actively trying to foster Icelandic identity within the population, but my understanding is that it is a little bit like American folk stories, in that they are something that people emphasize a lot when trying to separate American culture from British culture, since the two societies are very similar in a lot of ways, and it's something that people take a great deal of national pride in. (Obviously they also differ in major ways from American folk stories, but hopefully you get what I'm trying to say here).

On the topic, I have seen, in descending order of confidence, the Prose Edda, Heimskringla, and Egil's Saga attributed to Snorri Sturlusson. Are any of these actually confident attributions?

First two are very confident attributions, pretty much definite. Snorri was not only a writer, he was also a powerful chieftain in Iceland and many sources confirm his brilliance and talent for writing. Egil's saga is just a theory, there are no sources to back it up since the sagas were always written anonymously since they had been passed down for generations orally so there was no "author" that put his name down when they were written. Because of similarities in the writing style and the time it was written, scholars have suggested Snorri was the writer.

Side note: This is where Snorri Sturluson lived and yes, that's his pool. The dude had a hot tub in front of his crib in the 13th century, now that's a medieval pimp right there.

• How bad has source loss been on the sagas? The Complete Sagas of the Icelanders has about forty full Islendinga sogur and about as many thattr. How does this compare to the total output? Are there lists of sagas that we don't have? What about for the other genres?
  

Frankly, we don't know, but as far as sögur are concerned, we're pretty sure that we've got most of the Íslendingasögur that were written preserved somewhere. There are some references to lost Fornaldasögur, but none I can think of off the top of my head. Þættir are a bit of a different story, as they tended to be more numerous and less well-preserved than sögur. As far as poetry goes, we have fragments of vísir and drápur which are otherwise lost, and reference to lost poems inside of sögur.

• What was the process of preservation and compilation of the ones we do have? was there a (I assume) nineteenth century movement to gather the ones that survived together, or have they more or less been read continuously to this day? Were they in monasteries?

Most manuscripts in Iceland, at least, were owned either by wealthy bishops or other leading men. In the 17th and century, Árni Magnússon began assembling a huge collection of Icelandic manuscripts, which forms the basis of the MS collections here in Iceland and in Denmark.

• What was their reception outside of Iceland? Was it notably higher in Norway than in Denmark and Sweden? When did people outside of Iceland begin reading them?

This I'm gonna have to pass on. Hopefully someone more specialized in Norwegian, Swedish, or Danish manuscripts than I can help.

*What do we know about their production? Who was writing these works? Was it monks, local elites, skalds, or all of them? If we take these works as cohesive works of literature, why don't we have names?

Ah, but we do have names! Ish. We know who commissioned some of them - people like Ári froði, or Sæmundr prestr - but as to who did the actual writing and composition...well, that's less clear. You might want to check out Gísli Sigurðssons Manuscripts of Iceland for more information.

*On the topic, I have seen, in descending order of confidence, the Prose Edda, Heimskringla, and Egil's Saga attributed to Snorri Sturlusson. Are any of these actually confident attributions?

The Edda is the most reliably attributed piece of Snorri's work, and Egils saga is a likely one, too. He probably had a hand in Heimskringla too, but we're not 100% sure on any of them, unfortunately.

*Was Iceland the only place these were being produced? I realize this is a huge questions, but how was tiny, marginal Iceland the production site of such a breathtaking and unique body of literature?

Not even remotely! We have sögur from Denmark, Sweden, and Norway showing up - most usually Konungasögur, or Fornaldasögur - all over the place.

*Njala Saga is pretty universally considered the greatest of the Icelandic sagas, and with good reason. But how was it given this designation? Also, it seems different than the other sagas, not only in its length but also in its sensitivity of characterization and, for lack of a better word, literality. It seems more carefully composed than others, and to a certain extent rewards careful examination more. Is there any explanation for this seeming distinctiveness outside of simply artistic genius?

There's actually a pretty convincing argument bandied about by some scholars (Ármann Jakobsson, Gísli, and Torfi Tulinius have all spoken about it, but I don't know any publications off the top of my head) that it was in fact two sögur combined into one. If you read the first half as Gunnars saga af Hliðarendi and the second half as Brennu-Njáls saga, they make much more sense; Gunnars section of the saga is a much more traditional Útlendingasaga, whereas Njáls section is very much an Íslendingasaga, concerned with legal proceedings and society.

*How would these have been consumed? Were they meant for oral presentation or individual study?

Gísli's your best bet, again, but they'd have likely been read both silently and to audiences, I'd imagine.

*How widely known would they and the stories have been?

hahahahaha Oh, boy, you've opened a can of worms. You'll want to read Gísli's The medieval Icelandic saga and oral tradition : a discourse on method to get a good grasp on things.

*How and when did they go out of fashion? I have heard they were supplanted by Continental literature, but, for lack of a better phrasing, why?

They never really went out of fashion; Riddarasögur became popular with the 14th century, of course, but people were still transmitting Íslendingasögur well into the 18th century; Laxdæla saga has over 90 different MSes, for example! You'll want to see about contacting /u/bookie_monster about some of her work on that saga, if you want to know more though.

*The sagas often incorporate bits of skaldic poetry. Can we say how old these are? Particularly, are the bits of skaldic poetry used in the Heimskringla authentic and contemporary to the events describes?

Skaldic verse is...interesting. We know there are skalds from the 11th century whose work we have preserved, and they appear all over the place in the sögur. Diana Whaley edited the first volume of Skaldic Verse, Poetry in the Kings sagas, which might give you more inforation.

*Question from within the sagas themselves, who was Gudman the Powerful? He shows up in a quite a few sagas, but usually in the background. My assumption is that he was a somewhat anachronistic figure, more akin to the world of the thirteenth century than the tenth, but is that accurate?

Again, not really my area, but you might want to contact Ármann Jakobsson at Háskóli Íslands for more information on him; he could certainly help.

*Why did Gunnar turn back?

Because he's a good outlaw and if he didn't, the saga wouldn't have continued.

How bad has source loss been on the sagas? The Complete Sagas of the Icelanders has about forty full Islendinga sogur and about as many thattr. How does this compare to the total output? Are there lists of sagas that we don't have? What about for the other genres? What was the process of preservation and compilation of the ones we do have? was there a (I assume) nineteenth century movement to gather the ones that survived together, or have they more or less been read continuously to this day? Were they in monasteries? What was their reception outside of Iceland? Was it notably higher in Norway than in Denmark and Sweden? When did people outside of Iceland begin reading them?

It was during the late days of the Kalmar Union that people in Denmark, Norway and Sweden started appreciating the icelandic sagas. Here they where seen as a part of a common nordic past and over the next 200 years( 1500-1700) a large number of icelandic texts, books and law documents would move to Denmark and Sweden, as many icelanders send their family sagas to Denmark and Sweden to gain favour with the nobility. Here the texts became part of private libraries and often disappeared. There where also some centralized attemptes to gather and protect the texts as when Frederik III of Denmark ordered Brynjólfur Sveinsson a bishop on Iceland to gather as many ancient texts as possible hand them over to the crown. These attemptes where sadly never that succesfull and most of the sagas we have have now come from the Arnamagnæanske text collection. These texts where gathered by Arni Magnusson who worked at the Danish National Archives and was professor philosophiae et antiquitatum danicarum at the University of Copenhagen. When he died in 1730 he donated his entire collection of text to the University of Copenhagen, about 2500 documents of which 1800 came from Iceland. The Arnamagnæanske text collection was in the Danish National Archives until it where slowly given back to Iceland.

Was Iceland the only place these were being produced? I realize this is a huge questions, but how was tiny, marginal Iceland the production site of such a breathtaking and unique body of literature?

Sagas come from an oral tradition. The word saga itself means speak. Sagas was pretty normal in most germanic traditions, but they where rarely written down, because they where meant to be oral. We have a few sagas from outside Iceland, most of them Norweigen. We have other written material from the same time, that also deals with many of the same subjects, but because this written material is only meant to be written and read they are not considered to be sagas.

How would these have been consumed? Were they meant for oral presentation or individual study?

Most of them where meant for oral presentation, where one person read the book aloud for a group of people, but a few of them like the Eddas are also seen as "text books" for poets in training and as such could have been used for individual studies, but they where first and foremost for oral presentation read aloud during the winter.

How widely known would they and the stories have been?

Depends a lot on the stories and the time periode. Many of the histories in the king sagas and legendary sagas seems to be related to stories we find elsewhere like in Saxo Grammaticus, but most sagas of the Icelanders seems to be unique and not found anywhere else.