There is a great article about the Lagarfljotsormur on Wikipedia. Check it out. http://en.wikipedia.org/wiki/Lagarflj%C3%B3t_Worm
Few days ago Hjortur Kjerulf, a farmer in Fljotsdalur valley East Iceland, recorded a remarkable video of some large creature swimming upstream in the river Jökulsa in Fljotsdal. That river is one of the main rivers that runs into the great lake Lagarfljot which is just 2 km away from the farmers home. Lake Lagarfljot is famous for begin very deep and for its monsterous wyrm that has appeared there ever since 1345. The video clip has now spread around the world with the question, is this the famous lake monster Lagarfljotsormur, or its baby. You can view this clip on Youtube http://www.youtube.com/watch?v=8OmyyHyya64 and judge for yourself.