Condor had better range than the planes you mention. Agree not possible to attack from Denmark, but different story from Norway. Brits were very concerned about it. It was discussed as early as WW 1 by German military higher ups. They visited the island in 1938 with glider teams & survey persons. Seaplanes also have great range.
DO 18 Range: 3,500 km (1,890 nmi, 2,175 mi)
Distance from Berlin to Rome
Distance is 1185 kilometers or 736 miles or 640 nautical miles
JU 52
and could fly from Berlin to Rome in eight hours.
http://en.wikipedia.org/wiki/Junkers_Ju_52If it could fly with 17 passengers 640 miles plus their baggage, there's no
reason it couldn't make it 600 miles to grass strips on Icelands east shore with either troops or small cargo load.
"Given RN superiority at sea, even if the force had made it to Iceland intact, they probably would have been forced to surrender rather quickly, Iceland is much too far away for the Lufwaffe to be able to oppose the RN effectively."
Given that airstrips can be built in 3 weeks, ( as was done in Norway), Luftwaffe will be operational quickly before British can react with a mission to Iceland. They have to prepare, load ships, plan etc. This cannot be done in a week. Supplies have to be procured, men assigned all this while the RN is occupied with Norway.
& U-boats will form a line around Reykjavic. I think you're right about New York distance though.