How we love to tinker with the name 'Egypt'; we'd never bother to do so with 'Kettering'. It's a function of the exoticism we like to port into the concept: Aegypt; land of the Gypsies; land of the Copts' Edge-ypt, the country at the edge of the world. 'Aegypt', sounds attractively archaic to us, not just because it is a tanscription of the Latin, but because that 'ae' ligature is itself a marker of ancientness. The Egyptian Arabic word is Máṣr, it seems:
The English name "Egypt" came via the Latin word Aegyptus derived from the ancient Greek word Aígyptos (Αίγυπτος). The adjective aigýpti, aigýptios was borrowed into Coptic as gyptios, kyptios, and from there into Arabic as qubṭī, back formed into qubṭ, whence English Copt ... Strabo provided a folk etymology according to which Aígyptos (Αίγυπτος ) had evolved as a compound from Aegaeon uptiōs (Aἰγαίου ὑπτίως), meaning "below the Aegean".
The idea of this dust and dry land is named because it is in some sense under the sea is nice; but I'm struck that nobody has ever essayed the alternative spelling, and etymology, Oegypt: Oίγυπτος from Oίγυς [L&S: 'woe, misery, distress, hardship, suffering'] the land of hardship, the place of suffering.