No this is not a joke. I have just done it in 6 minutes, but there are certain things that you must do to achieve this.
I will take you through it step by step.

1: Most of you know this allready but for those who don't. You must save the game in front of Malwick and keep reloading till you get want with the max 31 charges and then

save/reload at magic shop to get a recharge item scroll (2 if you are lucky or prepared to spend lots of time)

2) It is imperitive that you kill the Dragon before he gets all the rats otherwise you will then have to run around the the cave until he is in a position where you run in and out from the doorway to fire shots at him with the wand to avoid getting fried, and thats when you start using minutes rather than seconds at a time to strike him each time.
For this reason you must enter the cave in combat mode and not grab the contestants shield till after you Kill the dragon.

COMBAT PRINCIPLES

1) As i said you enter the cave in combat mode and engage the dragon Immediately. You hand the wand to whoever is highlighted and fire, but you must only accept certain hits.
The Fireball wand will do anything between 15 to 40 plus damage with most shots in the 20s, so you must only accept shots that do 35 or more damage otherwise reload.

2) MAIN STEP. You must never allow a combat turn to pass where all the players take their turn and you advance to the next turn because thats how minutes are used up rather than seconds.
If all your players have taken a turn then you must save the game and reload to take the next shot.
This is a principle you should apply to all combat stuations until your castle is fixed and you safely leave harmondale castle with war declared in you log book, and again after Judge Grey dies and you choose your path.

EXAMPLE. When you are clearing out the Goblins in Harmondale castle, once you have run out of fire ball charges and must use you bows lets say you have 3 rats in front of you.
you hit with only 2 of you ranged shots and leave 1 rat alive in that combat turn.
Instead of going to the next turn where you lose a whole minute you save/Reload to take the next shot.
That is how combat is done in a speedgame for minimum clearing time so that the only minutes used up in the castle are the ones it takes you to walk around it.
Make sure that anything you fire at is far enough away that it can't get within close comabat range between reloads.
So this is the principle you are applying with the Red dragon.

3) Done correctly you should get at least 20 saves per minute. reloading does not cost you any time until you save after that reload which is why you must hit enter very quickly during each reload.
If while slaying the red dragon that more than 2 minutes passes then you are not hitting enter soon enough after reload.
If you are doing it right then you hit enter just as the blue reload bar gets to the end and your in combat mode a split second before you screen appears.

4) Once the dragon is slain (somtimes before recharding sometimes after depending on his HP and you average blast damage)
Then you apply this combat principle to any remaining rats in the cave. In fact don't bother using fire ball on them if you have bows, just don't allow a combat turn to pass like i said.
Save you wand for the temple and Harmondale castle.

5) Finally. Use the save/reload principle in (3) to multiloot the dragon and you should get up to 20 items per minite of game time. (I got 84 items in 4 minutes)
Remember that seconds are lost each time you save when the body remains after clicking on it if you want the item.

Hope this is usefull. Give it a blast and see if you can match or better my results