Moreover, if the word was originally Celtic, we can hazard an etymology (Cowgill 1986:68 fn. 10). Celtic *īsarnom can reflect earlier *ēsarnom, by the sound change discussed above; the latter can reflect *ēsh2r̥-no-m, derived from PIE *ésh2r̥ ‘blood’ (Hittite ēsḫar, Skt. ásr̥k) by lengthening the root vowel (a derivational process called “vr̥ddhi”) and adding a well-known suffix. As Warren Cowgill pointed out to me some thirty years ago, there are at least two good reasons why iron might be called ‘blood-metal’; the fact that it rusts is one of them.
The other inference from "blood-metal" to "iron" is extremely Norse in sentiment (see my old post on kennings); I wonder if that's how the etymology really went, in which case it would seem that kennings must have been more commonplace in Celtic (and other?) languages than I would have thought.