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Recommended overnight stops on Iceland ring road

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Planning planning planning for an upcoming trip in August 2015. I need help figuring out good places to overnight as we do the ring road w/ two adults and two kids (age 12 and 8). I am swamped with information from the internet and guidebooks and all the very difficult to keep track of Icelandic names. I have a poor sense of how long it takes to get from place to place. I have been to Norway (not driving) and all over Hawaii (driving) and I do understand how mountains and shorelines and such can make a route much longer than it seems. I'd like to break up our drives in to shortish chunks with breaks mid-day. I would also ideally like a couple stops where we stay in the same place for 2 nights or so. I get an idea of the things we want to see - but they seem pretty scattered and so picking a "base" is what is giving me fits.

What I have so far:
Day 1 Thursday - arrive early morning. Reykjavic. Wander around, get food, get hotel settled, nap, see maybe one museum or botanical garden. Shopping. Pool.
Day 2: Reykjavic: Friday. Vioey and ride bikes. Harbor. Shopping. Pool in later afternoon.
Day 3: Saturday: flea market, depart Reykjavic to>.....heading clockwise?
Day 4 Sun
Day 5 Mon
Day 6 Tues
Day 7 Wed
Day 8 Thur
Day 9 Fri
Day 10 Sat
Day 11 Sun
Day 12 Mon
Day 13 - Tues Golden circle - overnight in Reykjavic?
Day 14 - Fly home in the afternoon

Thanks in advance for any thoughts or ideas!

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