How does a violent Icelandic Independence movement occur?

Iceland was ruled by Norway, and later Denmark for centuries. Denmark affectively ruined Iceland with its exclusive trade policies, making Iceland one of the poorest countries in all of Europe.

However, there was a massive Icelandic nationalist movement during the 1800's, which eventually led to self-rule 1874, then an act of union in 1918, and finally the establishment of the Icelandic Republic in 1944. All of this was done, remarkably, in a peaceful fashion.

How can Iceland gain independence earlier (ie. in the 19th century), and how can this turn violent? Iceland would presumably return to a Commonwealth, but what would an earlier independent Iceland be like? Who would it ally with, and who would be its enemies? Would it attempt expansion? Would fishing territory conflict with other countries (Britain, Norway, ect.) be likely?
 
Rough TL here. After Denmark does better in the Second Schleswig War (a longer war and unrest in Austria causes a treaty ceding Holstein to Prussia but promising demilitarization, along with population transfers). Denmark remains a strongly militarized state with a stronger sense of national pride. This leads the Danish government to reject Icelandic requests for substantial Home Rule, although it funnels more money into development of a naval base there (partially leased to France, who is eager to get closer to a rival of rising Germany) and appoints an Icelander to the governorship of the island.

By the 1890s, Denmark, which had continued to industrialize, especially in the armament industry to supply its military, sees increasing labour unrest and socialist activism. The Danish establishment, which is highly conservative and supported by a nationalistic military, sees this as a threat. Danish labour organizers are increasingly jailed and exiled to Iceland, which is seen as an out-of-the way territory where they can't trouble the Danish regime.

During an alt-WW1, in which Denmark invades Germany to regain its lost territories in Holstein, German operatives begin to stir up an increasingly unhappy population in Iceland. Labour organizers, some of whom have stayed in Iceland after being released from prison, work with German agents to organize an alliance between Icelandic nationalists and socialist radicals, who have made inroads in organizing fishing co-operatives and dockworkers' and other unions. This leads to revolution.

As the end of the war draws near, with German forces occupying most of Jutland and blockading Copenhagen, the Danish regime makes peace in exchange for cession of Schleswig to Germany. Danish forces are then rushed to put down the already successful Icelandic Peoples' Republic's militias. A red flag rises in the far North as the Icelandic forces are victorious, leading to a democratic socialist Iceland that has liberated itself from Danish oppression.
 
Where did Americans find people to attack? They attack loyalists, and Danish troops sent over there to quell them.
Yes, and the Danes can send over more troops than the entire population of the island, so the revolution would fail miserably, and the Icelandic culture, language and nation might very well be wiped out.
 
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