Same. Wife and I went for New Years this year and it was by far one of the most satisfying vacations I've ever taken. Absolutely nothing about the place is overrated, and we lament how little of it we've experienced.
It is as close to magic as anywhere I've been, and their New Year celebration is insanity.
I went up to the hill in the center of Reykjavik for New Years and was astonished, completely astonished by the amount of fireworks that could be seen.
If you can, see if you can get to a bonfire a few hours beforehand. Travel / tourism agencies can arrange this.
Also, if you'd enjoy seeing the Aurora Borealis, know that due to weather, clouds, etc., it isn't very reliable, and it may be best to plan on multiple attempts at it. The experiences we had ranged from disappointing to terrifically amazing, but if we'd only gone the one time, we'd have left without having experienced it.
We visited in January 2017 and I'd love to go back when there's more than 5 hours of daylight. The trip was spectacular. And it's an easy flight from DC and 5 nights was plenty to hit most of the easy tourist spots.
Winter is the ideal time to go northern lights hunting. Either way, I've been propably too often, 5 times by now, twice in summer including one highland crossing, and three times in winter. My recomondation would be, if budget and vacation time allows, to visit Iceland once in summer and once in winter.
I usually go a new place everytime but I simply couldn't get enough of it just once and had to go again ASAP.
Hopefully this situation turns out better than the worse predictions.