The Saga of Freyr’s Lost Sword

We all know the story of how Freyr gave his magic sword to Skirnir when he sent him to Jotunheim to deliver Freyr’s message of love to Gerd, and that after more than a little persuading (and maybe a few threats) she finally accepted. But what happened to the sword after...is a secret known only to a few.
Riding the long road back to Asgard, Skirnir rounded a corner to find a huge jotunn standing in the road. In one hand he held a club the size of a small tree. In the other, chains holding back a pack of snarling dogs. “I hear you’re trying to take something of mine,” he rumbled. Skirnir loosened Freyr’s sword in its sheath, preparing for a fight that even the sword’s great magic might not win, when suddenly he heard whistling from further down the road. The jotunn heard it too, and turned to look for its source.
Around the next bend came none other than Loki himself, strolling down the road without a care in the world, whistling a merry tune...which tapered off when he saw the scene on the road before him. “What have we here?” he asked in his sly way. “Skirnir, it looks like you’ve run into some trouble.” Loki looked the jotunn up and down. “Big trouble.” “And that looks like Freyr’s horse you’ve got there. Did he send you on an errand?”
The jotunn turned back and focused his dark gaze on Skirnir. “I am Gymir, father of Gerd, breeder of the finest hunting hounds in the nine realms. This puny human came here to steal my most beautiful daughter, but she’s promised to Surtr, and he promised me her weight in gold. So unless the human has something better, you’ll be taking whatever’s left of him after my dogs are finished back to Freyr in a sack.”
While Gymir’s attention was turned, Loki slid past him and came to stand next to Skirnir. He glanced briefly at the blade at Skirnir’s side, then looked him in the eye knowingly. “Hmm, yes, it does seem that you are entitled to some compensation.”
Skirnir leapt off his horse and faced Loki, where he could speak closely without the jotunn overhearing. “Loki no! You know the tale of the volva. Freyr must have that sword to fight with at Ragnarök, or the whole world is doomed!” he whispered fiercely. “There must be something you can do!” he pleaded.
“What’s that you two are muttering about over there?” the jotunn roared. “Loki, I know your tricks, but they won’t save you this time. There’s nowhere you can hide that my dogs can’t track you!” He loosened the hand with the chains slightly, and the dogs surged forward, howling and snapping, slaver flying from their curled lips.
His face a mask of clearly feigned innocence, Loki whispered back, “Sorry, not this time. I’m afraid we have no other choice.” Then, more loudly so Gymir could hear, Loki announced “Freyr’s man here does indeed have something of great value, something Surtr will want even more than a bride.” And in the blink of an eye, Loki pulled Freyr’s sword from the sheath and held it aloft, where it caught the sun and flashed like fire formed into steel. “This is Freyr’s own magic sword, forged by the sons of Ivaldi, imbued with magic so powerful, it fights by itself!”
Gymir gripped the chains more tightly and lowered his club slightly. “Prove it,” he growled. Loki looked around briefly, his eyes alighting on a small tree just to one side of the road, then he released the sword. It flew swiftly to the tree, and with one quick swing sliced straight through the narrow trunk, then flew back to Loki’s hand.
Gymir’s eyebrows leapt up, and he almost dropped his club in surprise. “Well now! That is something, isn’t it?” Releasing the club to swing from his wrist on its strap, he scratched his beard thoughtfully. “You’ve got yourself a deal,” he concluded. “You hand over that sword...slowly, and I’ll let you two be on your way.”
“And you won’t send your dogs after us, will you?” Loki pointed at his shoes, then made a few quick steps up, as if walking up stairs, but climbed right off the ground on thin air, “Because while your dogs could find me, it wouldn’t be before I told Thor about a jotunn who broke his bargain.”
Then it was Gymir’s turn to look troubled. “No no, of course not. No need to bother Thor about such things. I swear by my daughter’s life that our bargain is fair. I won’t send my hounds after you.”
Loki turned and handed the sword back to Skirnir, who slid it into the sheath, then reluctantly lifted the shoulder strap over his head. He cautiously approached Gymir, eyeing the snarling dogs suspiciously. Skirnir passed the sword over, then returned to Loki’s side. Gymir tucked the sheathed sword into his belt, then rolled the chains up tighter around his wrist, yanking the dogs back. “Down you beasts!” he shouted at them, then marched past the the other two, back the way Skirnir had just come.
Skirnir, face red with barely-contained fury, turned to Loki. “Now look what you’ve done!” “Quiet!” Loki snapped, then watched as Gymir stomped off down the road. When he was well out of earshot, Loki turned back to Skirnir. “What I’ve done?” he asked slyly. “Oh no, it was you who handed Freyr’s sword over to the jotunns, almost directly into Surtr’s own hands, in fact. Now, we wouldn’t want Freyr, or any of the other gods, to find out you did that, would we?” The blood drained from Skirnir’s face at the thought. “Hmm, I’ll tell you what. I’ll make a bargain with you. I’ll agree to never tell anyone about your actions here, if you agree to never tell anyone you saw me today. Does that sound fair?”
Realizing he had no choice, Skirnir agreed to his part of the bargain, and the two parted ways there on the road. Skirnir returning to Asgard, Loki continuing on deeper into Jotunheim, on business of his own. When Skirnir finally arrived, Freyr was so impatient to hear Gerd’s response, and then so obsessed with writing poems in preparation for her arrival, that he completely forgot to even ask about his sword. The gods won’t realize it is missing until Heimdall’s horn sounds, and by then it will be far too late.