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First and foremost, do you have the spell 'Poison Cloud'? If so, set it to quickspell - this spell works wonders on him. Then you can click away on the right mouse button and poison him to death (those who don't have magic ability will simply fire their bows). Also, make sure you fight him in Turn Based Mode. TBM gives you the chance to hit the dragon more times than he can hit you. The dragon is very tough, he has about 39,000HP. And the main problem is that he can regenerate about 200HP for every round of hits. So by turning on TBM (just hit 'enter') you give him less chances to either hit you or regenerate HP. And you give yourself more chances to hit him. So as long as you do more than 200HP damage during each round, you should see his HP start to drop. It does take a while to kill him off though, maybe 20 real time minutes or so. Now, here's another spoiler/tip. After he is dead, turn off TBM and save your game. Then go over to the two black chests. Set a beacon in front of one of them using Lloyd's Beacon spell. Loot the chests. You can now town portal out to anywhere, LB back in, and the chests will be full again. Loot them as many times as you want (portalling out then back in after each time you empty them) to collect artifacts and cash.
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