Gosh, I was attempting to go through this stuff the other way when I went to Oz. Lots of paperwork... Let's go through your plan step by step:
You want to come by the end of the year, right? Where in Europe will you be? This time of the year is our winter and, depending on your location, it can be anything from wet and uncomfortable to f***ing freezing. You definitely won't get pleasant outdoor life temperatures that would appeal any Australian soul. Depending on where you plan to go you will have different options of how to spend your days, but camping in our winter will require adequate equipment.
Iceland in winter is dark (which can be pleasant, though), chilly and most of the roads are, well, not only closed but non-existent. They get opened up in spring (April/May/June) when a big grader transverses the interior. In winter, even your outback-touring equipped car will be no use in Iceland. Have a look at their modified trucks, unless you have one such, forget it. I'll see if I can dig out some pics for you if you want.
Iceland is expensive, which has to do with the distance to anywhere in the rest of the world, and the fact that all goods and consumables have to be imported. The ferry to Iceland is quite expensive (not sure what tariff you are referring to) and needs to be booked well in advance, at least during the summer months. How long it takes depends on the route as some trips include a stop at the Faroe Islands (at least that's how things were a while ago).
When renting a 4x4 in Iceland, you can assume the car will be qualified for the conditions there. Water crossings are just one of the challenges, as are gravel fields, rocks and boulders, and the odd 50cm step in the road.. Iceland is certainly worth a visit, or even more, and if you are located in Europe it may make sense to take your vehicle along, but from Australia???
Next question: what will you be doing all the time in Europe? Will you have to work or is the time over here entirely at your disposal?
Importing your car into Europe shouldn't be much of a concern, as long as it is properly registered in Australia (your country of residence) and roadworthy. Insurance can be sorted, depending on your point of entry. A Carnet is most likely unnecessary, but you will have to pass customs. Once done that, you're free to travel around in most of the countries (if you have an EU-visa). Travelling around Europe you hardly need a 4x4, but, of course any such vehicle will be able to take you a bit further afield. Have in mind, though, that offroading is illegal in several European countries and you will get heavily fined if caught.
The main trouble is then re-importing your car into Aussieland. You will probably have to allow for the customs people to clean the car on your behalf and face the bill. Finding the right shipping agent can save you $$$$ as our offers we've got differed by a fair margin. It pays to shop around.
Please get in touch if you need some unbiased advice about your plans and travels. PM me if you wish. If your plan and the road leads you to my premises I'll offer you a drink or two (and afterwards a place to stay of course). Have a good time! Planning is half the enjoyment of any adventure!
Cheers
PS: Come to think of it, why not try making contact with some Land Rover folks on Iceland? They might be able to help you getting a decent vehicle during your stay, i.e. that you don't have to hire form a company but privately at better rates. Just a thought...
