First, Have you checked your inventories? If you're in the right place and if you win all the games, the stuffed dragon should just appear in the inventory of one of your characters.There are two areas where you have to participate in games. One is in Guberland, in an area south of Guberland township. You don't get it from here.
The other is at the Gathering in Thjorgard - leave Thjorgard town by the western gate (or if you leave by the eastern gate, follow the path westward around the seaward side of the town through the tunnel), go up the hill, and keep left anlong the foot of the moutains. This is where you get the stuffed dragon.
