Learn Icelandic: Lykillinn týndist þegar ég var veikur.

The -st ending changes the active verb týna (to lose) into the middle voice verb týnast (to get lost). Here, it shows that the action happened spontaneously. We aren't focusing on who lost the key, just the fact that it went missing.

The active verb týna requires a dative object. Why is lykillinn in the nominative case here?

You might remember that active verbs often force their objects into cases like the dative (for example, ég týndi lyklinum means "I lost the key"). But when you use the middle voice for a spontaneous action, the old object becomes the new subject. Because subjects are almost always in the nominative case, the key becomes the nominative lykillinn.

How do we know týndist is in the past tense?

You can spot the past tense by looking at the letters right before the -st ending. The active past tense for "it lost" is týndi. When you add -st, you get týndist (it got lost). If it were happening right now (present tense), it would be built from the active present týnir, dropping the -r to become týnist.

Why does the sentence use veikur instead of the dictionary form veik?