I had no idea on weather for Iceland/August. Here’s the details for city, though perhaps cooler for hiking(?)
For rain/wind pants, I like it if there is room under for a very thin pair of leggings (long or capri). Or even just tights. That way I can adjust if more warmth needed. I really like REI/Sahara convertible pants (which I usually wear as long pants) but have gotten other rain/wind pants cheap at ARC thrift shop.