I know Hnolt analized the form 'olt' to be historical Dat.sg.N.
This is not correct, I've been always saying that 'olt' is an old accusative form (Acc.sg.N.).
One with 'fro ollt' where we can see the dative form, not by the ending, but by the vowel. And we know dative is used here in old norse too. And the other example, we got 'a' where old norse would use a form of 'allr' without any u-mutation.
The lack of 'u' in 'olt' does not proov it is not a dative form, the case ending system at that time was corrupt, which is also shown in 'nam thite'. Another thing which supports it could be a dative form is that as far i know, we dont have en example of initial a > o in orkney norn, so if not analogical caused by confusion, it must be directly derived from old norse öllu. And the 't' in 'olt' maybe just be because 'll' changed in a similar way it did in icelandic and faroese.
Your ideas are really interesting, but you're missing one point: -t in 'olt' and 'ilt' comes from the Nom/Acc.sg.N. ending, it was never used for dative. As for the vocalism of the word, it has to be said that 'l' is often labialising preceding vowels, English 'all,wall,tall' is an example that first pops up in mind. In several languages 'l' is interchangeable with 'v/w'. It might have been an interchange between ON 'a' and 'ǫ' as well, but in any case this is not the old dative form, that's quite clear. And the following 'ilt' is 100% the old nominative/accusative form. So I think we're on the right path.
And we know examples of dative in orkney norn. So i think it is likely that there really was a distinct dative and a distinct accusative form in the time Orkney Norn was alive and spoken as the normal language and english only was spoken by few. And is it not that orkney norn we want to reconstruct?
I don't mind using old dative in set expressions (like it's done in Danish), but I still think that the language of the prayer is already free of dative as a regular case.