I've never been able to complete this quest & see the dragon. This quest is broken on my system.
I did the Dragon and the master quest (dragon very impressive and powerful, about the same strengh as a squad of 4 young dragon) and both worked. What is your system? (computer)
windows 7, 64bit, 8Gb ram, NVIDIA GEForce GTS 240 video card, intel i5 core 3.2 GHZ
.. On most of the upper level quests I either get to the goodie hut and absolutely nothing happens (no quest screen), or on those that do work I get to the quest loacation (usually has some kind of yellow picture) and nothing happens, it just disappears. At least one showed a non-yellow image pictorial (can't remember which quest it was) and the picture just "disappeared" as soon as I entered the square and never reappeared & nothing happened.
Basically, the only quests that really work are the ones that return gold, material, metal, books, potions, etc, most of the others simply don't work. The ones with the standard pouch, wagon, etc images work. Those little white huts mostly don't work.
... BTW, I've always used groups with at least one hero, not necessarily just the sovereign. In most cases, three to four heroes plus an archer to deal with any possible monsters. I mostly just look for goodie for the gold, those 200 gold pouches come in very handy sometimes.