Okay, the only way to get around this is via a hex editor, you gotta find the hex ID for Iceland, best way is to search for an Icelandic name(16-bit Unicode is the formatting used, I'd reccommend using the XVI32 hex editor for this) and it should be like this, say the name is Mike:
<pre class="ip-ubbcode-code-pre">M i k e </pre>
These values in this part are in hex(the middle bit), BTW, not ASCII. Right, after the name, is a name count. This doesn't matter. Then there will be a 00, this again doesn't matter. Then there should be another value. This value is the name's country code. You can either change this to another country, or if you change it to 00, it will mean the name has no country and will not be used.
You'll find the names in the mid-lower parts of the server_db.dat.
IMPORTANT: MAKE A BACK UP OF YOUR server_db.dat FILE AND MAKE SURE YOU FULLY UNDERSTAND WHAT I SAID BEFORE TRYING THIS UNLESS YOU WILL BREAK YOUR GAME DATABASE AND HAVE TO REINSTALL.