No reason to be scared, Germany is about the easiest place in Europe to buy and register a bike, moreover there is a very healthy market for second hand bikes, which are generally very well maintained. I really don't understand what hassle there could be, or exactly what you mean about "moving your address" to Germany, as a German citizen you can buy a bike just like anyone else and probably just supply the address of a friend or relative in Germany. After that it should be extremely straightforward to apply to ADAC for a Carnet. Why do you need to get insurance in Iceland?
I bought my bike in Germany, put export plates on it and had it ready to ride back to Italy in under an hour, it's that simple.
Just do some googling, starting with the ADAC website , go for it and enjoy your journey...
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