So what I am trying to do is to use the `letter-classic` class with LuaLaTeX (`This is LuaTeX, Version beta-0.80.0 (MiKTeX 2.9) (rev 5238) (format=lualatex 2015.11.10) 25 NOV 2015 09:30`) as included in MikTeX.

It bombs in `icelandic.ldf` with errors like these:

```
! String contains an invalid utf-8 sequence.
l.144 \DeclareTextCommand{\ooob}{T1}{\sob {
                                         ó}{.85}{0}{.04}{0}}
A funny symbol that I can't read has just been (re)read.
Just continue, I'll change it to 0xFFFD.

! String contains an invalid utf-8 sequence.
l.145 \DeclareTextCommand{\OOob}{T1}{\sob {
                                         Ó}{.7}{0}{0}{0}}
A funny symbol that I can't read has just been (re)read.
Just continue, I'll change it to 0xFFFD.

! String contains an invalid utf-8 sequence.
l.148 \DeclareTextCommand{\eeob}{T1}{\sob {
                                         é}{1}{0}{.04}{0}}
A funny symbol that I can't read has just been (re)read.
Just continue, I'll change it to 0xFFFD.

! String contains an invalid utf-8 sequence.
l.149 \DeclareTextCommand{\EEob}{T1}{\sob {
                                         É}{1}{0}{.04}{0}}
A funny symbol that I can't read has just been (re)read.
Just continue, I'll change it to 0xFFFD.

! String contains an invalid utf-8 sequence.
l.152 \declare@shorthand{icelandic}{"
                                   ó}{\ooob}
A funny symbol that I can't read has just been (re)read.
Just continue, I'll change it to 0xFFFD.

! String contains an invalid utf-8 sequence.
<argument> icelandic@sh@\string "@\string ï¿½
                                  \ooob @
l.153 \declare@shorthand
                      {icelandic}{"Ó}{\OOob}
A funny symbol that I can't read has just been (re)read.
Just continue, I'll change it to 0xFFFD.

```

My minimal working example is this one:

```
\documentclass[english,12pt,a4paper]{letter-classic}
\usepackage[T1]{fontenc}
\usepackage[icelandic,german,english]{babel}
\selectlanguage{english}
\newcommand{\ISL}[1]{\foreignlanguage{icelandic}{#1}}
\newcommand{\DEU}[1]{\foreignlanguage{german}{#1}}
%%\usepackage[utf8]{inputenc} % needed with pdfLaTeX, but not with LuaLaTeX (see comment below question)

\begin{document}

\begin{letter}{Troll family\\\ISL{Elliðaárdalur}\\\ISL{999 Reykjavík}\\ICELAND}
\fromname{\DEU{Mäxchen Mustermann}}
\fromstreet{\DEU{Musterstraße 123}}
\fromtown{12345 Musterstadt}
\fromphone{+49 123 4567890}
\fromtownshort{Musterstadt}
\fromsignature{\DEU{Mäxchen}}

\subject{\ISL{Jólasveinar}}
\opening{Folks,}

do you know the current address of the \ISL{Jólasveinar} and/or their parents \ISL{Grýla} and \ISL{Leppalúði}?

\closing{\ISL{Með kveðju,}}
\end{letter}

\end{document}

```

The actual document worked without problems until a few months ago, using pdfLaTeX (and still does, see below).

How it looks [![when rendered with pdfLaTeX](https://i.stack.imgur.com/GDk6Y.png)](https://i.stack.imgur.com/GDk6Y.png).

Can anyone explain to me how to mix Icelandic and German *using LuaLaTeX* with the `letter-classic` class?

---

I looked into the KOMA letter class already, but I prefer a slightly more modern/custom look for the letter head, such that at this moment I really want to avoid that one.