Denver to Europe cheap: Iceland then separate ticket to Europe?

Check the airport in Iceland and I believe you will see that Iceland Air are the only ones there, no other airlines flying in and out, which is why they can have such short layovers there. My last 2 were only 40 min. If your flight is late, they just hold the next one for you as chances are pretty good, that you aren't the only one getting on that next flight. They have a cool business plan going on there, as they want people to stay a few days.

I just checked SkyScanner and they list SAS and Norwegian flights out of Keflavik - but Jo is right about the ease and convenience of just going IcelandAir all the way. We just did it from Seattle to London and back, and it was dead cheap and very easy. And yes, they do hold the next flight if the incoming plane is late. The airport is COZY and clean and ultra-nice. (Although the fact that you actually have to go through the duty free shop on your way out is a little weird and cash-grabby. :-)

We booked our flights VERY last-minute and had to take a 17-hour layover on the way home. Turned out to be an awesome experience, and next time, we'll stay longer. IcelandAir has a deal going where you can stay in Iceland up to 7 days and incur no extra cost for the outbound flight to wherever you're headed in Europe.

Anyway, that was the long way around to: my suggestion is to book your flight on IcelandAir all the way.

I should also note that I'm willing to stay over in Iceland for a few days on the way to Europe. I'm also wanting to end-up in Europe around Netherlands (Amsterdam), or Belgium (Brusssels).

You will LOVE Iceland if you stay! I can recommend a fabulous guesthouse in Keflavik if you want to stay close to the airport rather than in Reykjavík... although that's likely where you'll want to be if you plan on more than an overnight turnaround. :-)

Kira:

Awesome! How many days should we spend in Iceland? Noting that's it'll be during mid-March, I'm guessing many areas of the island will be inaccessible, and definitely "tourist free". (Which could be an advantage and disadvantage).

I"m definitely interested in finding some place to stay as well. I know IcelandAir owns the Marina Hotel, and has packages with other hotels, but a private property would be even better.

How many days is an excellent question! We only had a 17-hour layover, and next time I'd like to go back in spring (not too late to maybe see the Aurora Borealis) and spend two or three days. March is smack dab in the middle of Aurora season, I think - or at least, not after it is over.

There is actually quite a lot to do there (check this list: http://icelandtravelblog.net/2011/top-10-must-dos-in-iceland-from-a-locals-point-of-view/) and I know that I definitely want to drive the Golden Circle, soak in the Blue Lagoon, see a flock of puffins, go horseback riding, hike somewhere in the weirdly glorious countryside, and check out thermal springs/Gullfoss/Geysir.

We were there just a couple of weeks ago and it seemed like most of the standard bus tour options were up and running. There's winter stuff to do - snowmobile tours and whatnot - but yes, it also seemed like the tourist load was quite, quite low.

My recommendation for a place to stay is in Keflavik (short layover - we didn't want to spend an hour on the road to Reykjavik). We flew blind and got a place last minute via Booking.com and completely lucked out. The Svitan Guesthouse (http://www.svitan.is/) is welcoming, cozy, and run by a really NICE woman who knows how to make you feel at home. We got in after midnight and let ourselves in (nothing was locked). In the morning, we discovered the kitchen was stocked with eggs, bacon, fresh tomatoes, cheese, bread and crackers, cereal, milk, vegan "milk," butter, vegan butter substitute, jams and jellies, peanut butter, hazelnut spread, tea, coffee, and lots of wonderful skyr!

After breakfast we walked the three whole blocks to the waterfront and ogled the cliffs and the sea, then explored the teensy, quaint downtown of Keflavik.

Of course, if you elect to stay in Reykjavik, there are a lot more options. I just had to give a shout-out to the Svitan. :-)