The Western Settlement was about 200 miles north of Greenland's Eastern Settlment, it was much smaller and far more remote with an apex population of about 1,000 or so while the Eastern Settlement achieved up to 5,000 inhabitants at its high point. The Western Settlement's proximity to the Disko Bay hunting grounds and Baffin Island made its location ideal for the provision of walrus ivory and furs, polar bear furs, white falcons, narwhale horns, etc.
In 1261 Greenland submitted to Norwegian rule and, more problematic, a royal edict of 1294 dictated that all trade with Greenland had to be approved (i.e. taxed) by the King. This was in addition to tithes required by the church. Directly after, the climate began turning worse with the onset of the Little Ice Age ... if the Baltic froze over in 1303, 1306 and 1307, the situation in Greenland should have been just as severe, and a drastic change from prior years and the Medieval Warm Period (see: http://www.uwgb.edu/dutchs/WestTech/x14thc.htm).
The Great Famine of 1315-1322 was a result of further climate deterioration in Europe and the last tithes were paid to the Church by the Western Settlement in 1327. By 1345 they were excused from tithe payments due to poverty, but had apparently already bailed for parts west as reported by Ivar Bardsson, the Bergen priest who went looking for them and found the area abandoned.
E.P. mentioned elsewhere that the demise of the Beothuk in Labrador (i.e. Markland) circa 1275 could be due to diseases introduced by the Norse. In the thesis, Native American tradition holds that the Greenlanders settled in Labrador first, but were driven north to Baffin Island due to their inability to get along with the locals. Over generations, survivors may have merged with the natives, resulting in 'blonde Eskimo' reports in the Canadian Arctic.