Translations and re-tellings of Norse legends for children and adults were popular well before Tolkien. The list of them becomes almost comical when lined up one after the other:
Popular Tales from the Norse (1859), The Heros of Asgard (1871), Norse Stories (1882), Legends of Norseland (1894), The Nine Worlds (1894), Myths of Northern Lands (1895), Old Norse Stories (1900), Asgard Stories (1901), In the Days of Giants (1902), Norroena (1906), Myths of the Norsemen (1909), Stories from the Norseland (1909), and Children of Odin (1920).
(Seriously? How did publishers keep finding a market for these? You’d think they’d have reached saturation.)
In the early years of adult fantasy fiction we have The Worm Ouroboros (1922), by Eric Rücker Eddison. Eddison was a member of the “Viking Society for Northern Research,” a society founded in 1892 that took itself rather too seriously; he was also an occasional member of the Inklings. Worm leans heavily on Norse as well as other mythologies, and is a repellent tale of bloodshed and war. It ends with the Demon Lords having a sad because everyone worth killing is dead. So the gods restart everything (that’s the “serpent eating it’s tail” part) so that the world can experience all that glorious stabbing again. Eddison reportedly found Tolkien’s world-view too soft, which tells us something.
The Nazi’s liked Norse imagery too. While Himmler was the main champion of overt Norse mysticism, more generally a Norse/Viking/Teutonic aesthetic was part of the crass pastiche of Nazi iconography.
Tolkien and Lewis were fans of Wagner, whose works slid neatly into the Nazi world-view and were easily exploited by them. Tolkien and Lewis studied his works as part of their Kólbitar Club, a precursor to the Inklings, begun in 1926 for the purpose of studying all things Norse. Later, in the aftermath of WWII, Tolkien distanced himself from Wagner (he was shocked — shocked! — at comparisons between his work and the Ring Cycle), while Lewis’s enthusiasm continued unabated (he wanted to write a prose version of the Ring Cycle).
Tolkien expressed his contempt for Nazis and their anti-semitism in 1938, when England was marshalling its forces against possible German aggression; but both Tolkien and Lewis developed a muddled-headed man-crush on poet Roy Campbell, champion of Franco’s fascist regime. Tolkien compared him to Aragorn, and both writers became Franco supporters. It is also clear from their writings that they were both drawn to autocratic rule and glorified violence. It would appear to the casual observer that what they opposed was the specific German program against which England had formed a consensus, and not fascism per se on any principled grounds.
It’s uncomfortable to realize that, lacking the benefit of hindsight, many people were drawn to aspects of the fascist aesthetic, even if they were not full-blown fascists. It appears in the children’s books such as The Good Master (1935) and The Singing Tree (1940) by Kate Seredy, in which the Nazi aesthetic of worship of youth and strength is palpable; and also in the breath-takingly wonderful King Solomon’s Ring (1949) by naturalist Konrad Lorenz, whose preference for healthy, strong plants and animals slides by barely noticed, until you learn that Lorenz was a Nazi supporter.
The same tension can be found in reactions to the work of Leni Riefenstal, the artistically talented and morally stunted photographer who created tour-de-force propaganda films for the Nazis. After the war she went on to something that appears completely different, photographing the Nuba people of Sudan. But her focus on glorifying animalistic youth and strength in these photographs led Susan Sontag to describe them as having a “Nazi aesthetic.” Sontag got a lot of blow-back for this, but honestly, she nailed it.
But in contrast, there are children’s books that rode the wave of Norse popularity right up to the eve of WWII, without even a whiff of war-glorifying, heroic-brute aesthetic. One notable example is The Ship the Flew (1939), by Hilda Lewis, in which four ordinary children find the god Frey’s magical ship Skidbladnir, which can sail on land or sea or air through time as well as space, and can fold up small enough to fit in one’s pocket. It reads more like an E. Nesbit book of 30 years earlier than anything else. It is fun and adventurous, and lets child readers indulge their ancient-cultures mania in a pretty much unproblematic way.