Complex sentence: The first element is "ló" (i.e., "lynx") and the last element is derived from Norse "fótr" (i.e., "foot"), as the shape of the island must have been compared with a foot of a lynx.
Split into simpler sentences: The first element is "ló"'lynx', the last element is derived from Norse "fótr" m'foot'. The shape of the island must have been compared with a foot of a lynx.