To cancel or not?

The Department of Transportation requires that airlines issue refunds for flights that they cancel or "significantly delay."

Carriers have a longstanding obligation to provide a prompt refund to a ticketed passenger when the carrier cancels the passenger’s flight or makes a significant change in the flight schedule and the passenger chooses not to accept the alternative offered by the carrier.1 The longstanding obligation of carriers to provide refunds for flights that carriers cancel or significantly delay does not cease when the flight disruptions are outside of the carrier’s control (e.g., a result of government restrictions).2

Most airlines would prefer to issue a voucher and will make that much easier for you. For example, with my British Airways flight, a voucher is possible (and easy) on the website. To get a refund you must call in.

But if you request a refund for a flight to/from the US that is either cancelled or "significantly delayed," the carrier is required to give you a full refund.

I will add that Icelandair is making their vouchers very attractive, as per their FAQ:

Terms and Conditions for Icelandair Travel Credit Voucher due to COVID-19
- are valid for booking three years from the date of issue, and for travel one year from booking.

That's the most generous voucher time limit policy that I've seen, surpassing Southwest, which I thought was very generous with their most recent time extensions.

Good to know. I will keep trying, but it has been hours of waiting on the phone without luck.

Yes, required though it may be, they are not required to make it easy.

Figuring out how to get it: the text from British Airways said to go to their site to get a refund; once there, the only option was a voucher; if you wanted a refund, you should call them. Clearly a trip to the website intending to show how easy their nice voucher would be!

Getting through is difficult: I got through to British Airways on the 7th try, my friend has tried 15+ times.

And once through, hold times may be long: I waited on hold 40+ minutes and feel like I was one of the lucky ones.

Getting what you want: Once you get through, be very clear that you want a refund: British Airways was good about this. I said I want a refund; that's what the very nice, chatty gent, working from his home in Manchester, England, processed for me. If you inquire about a voucher, they will surely encourage you to take one.

A dose of determination is helpful. Be prepared to quote from the US DOT language so they know you are aware of your rights!

Good luck with Icelandair

A quick check shows you can still purchase tickets from Seattle to Dublin via Iceland air for May 4th.
I think it is important for you to know what you want. Do you want a refund or a voucher?
For a refund, play the waiting game to see if they eventually cancel the flight. For a voucher, cancel yourself via the website.

It is unlikely that the flight will remain, so being patient and waiting for them to cancel is the wise choice. It should happen in the next week or so. Once cancelled, pay careful attention to their details and terms. They may "reassign" you to a different flight, or they may just cancel your reservation. If the former, you'll need to contact them to tell them the new flight does not work for you and you'll want a refund. I doubt they will give you a hassle, but their first choice might be a voucher offer. If the latter, they automatically must offer you something - and again, insist on a refund if that is what you want.

Thank you all for your helpful and encouraging advice!