Now, Morcarack is not 100% red dragon, since, for instance, he is rather susceptible to fire damage, so there might be a possibility he will yield level 5 treasure anyways. To my knowledge, only one person has claimed to have successfully looted an LB scroll from Morcarack, and even that person said it was probably due to a game error.

Personally, I`ve looted Morcarack a lot. (more than 10.000 times in each of three series performed on two different OSs). My numbers, for instance, indicates that there is a 1/25 chance to get an artifact/relic from him and that there is about a 1/10 chance for a successful multiloot. (Which means there is about a 1/250 chance of successfully multilooting an artifact/relic). However, I`ve never ever gotten an LB scroll, or another level 5 treasure, for that matter.