Þetta epli er súrt, en kaffið er ekki eins beiskt og ég hélt.

Because epli is a neuter singular noun here, and the demonstrative this has to agree with the noun in gender, number, and case.

So:

• þetta = nominative/accusative singular neuter
• þessi = nominative singular masculine or feminine

Since epli is neuter, þetta is the correct form.

Yes, it is singular here: this apple.

A tricky thing for learners is that some Icelandic neuter nouns can have the same form in singular and plural in certain cases. But in this sentence, þetta clearly shows that epli is singular, because þetta is a singular neuter form.

Because Icelandic normally does not use the suffixed definite article when a demonstrative like þetta is already there.

So:

• epli = apple
• eplið = the apple
• þetta epli = this apple

In other words, þetta already does the job of pointing out the noun, so eplið would usually be unnecessary here.

Because both adjectives agree with neuter singular nouns:

• epli is neuter singular, so súrt
• kaffið is neuter singular, so beiskt

Even though the adjectives come after er, they still agree with the subject.

Also, these are predicate adjectives, and predicate adjectives normally use the strong form in Icelandic. That is why you get:

• eplið er súrt
• kaffið er beiskt

not weak forms like súra or beiska.

If the adjective were placed directly before the noun, you would get something different, for example þetta súra epli.

Here en means but.

It connects two clauses and shows contrast:

• Þetta epli er súrt
• en kaffið er ekki eins beiskt og ég hélt

So the sentence is setting up a contrast between the apple and the coffee.

Kaffið means the coffee.

It is made from:

• kaffi = coffee
• -ið = the suffixed definite article here

Icelandic usually puts the at the end of the noun instead of using a separate word.

So:

• kaffi = coffee
• kaffið = the coffee

Because Icelandic main clauses follow the V2 rule, which means the finite verb usually comes in the second position.

In this clause:

• kaffið = first element
• er = second element
• ekki comes after that

So kaffið er ekki... is the normal order.

This is different from English in some ways, but it is very normal Icelandic word order.

This is the Icelandic pattern for not as bitter as.

The structure is:

• eins + adjective + og = as + adjective + as
• with ekki added: not as ... as

So:

• eins beiskt og = as bitter as
• ekki eins beiskt og = not as bitter as

Notice that the adjective stays in its basic form here, not a comparative form.

Not in this sentence.

After eins, og introduces the second part of the comparison, so it corresponds to the second as in English:

• eins beiskt og ég hélt = as bitter as I thought

So here og is part of the comparison structure, not the normal and.

This is important because Icelandic uses:

• comparative adjective + en for than
• eins/jafn ... og for as ... as

Because the sentence means not as bitter as I thought, not more bitter than I thought.

Icelandic uses eins ... og for this kind of equality comparison.

So:

• ekki eins beiskt og ég hélt = not as bitter as I thought
• beiskara en... would mean more bitter than...

Those are different ideas.

Hélt is the past tense of halda.

Although halda can mean hold, it can also mean think, suppose, believe in certain contexts.

Here it means:

• ég hélt = I thought

So this is a very common example of one Icelandic verb having more than one meaning depending on context.

Because Icelandic can leave that idea understood when it is obvious from context.

English does this too:

• The coffee isn’t as bitter as I thought

You do not have to say as I thought it was every time.

The Icelandic sentence works the same way. The meaning is understood as something like not as bitter as I thought it was/would be, even though those extra words are not stated explicitly.