Oh man, we just went through this.
The party was a ranged-attack Halfling Champion Fighter, Human Cleric of Life, Elvish Thief Rogue, Human Evoker Wizard and melee-based Human Champion Fighter, all 4th level, and an Elf Evoker Wizard, 3rd level. They went to Thundertree to look for Mirna's necklace. The first day there they killed some zombies and twig blights, and met Reidoth, who offered them a place to stay and warned them about the dragon and the cultists. They long rested at Reidoth's cottage, but when they awoke he was gone. They made their way eastward, staying in the south part of town to avoid the dragon, looking through each building for the necklace. They killed some zombies, killed some spiders, and then came across Reidoth's body, apparently killed by poison gas. They found the cultists' cottage, and were able to determine they were inside through some careful scouting.
All this time, I was making random encounter rolls. An 18-20 would mean the dragon took flight to look for food.
The party split in half to cover both doors of the cottage; Halfling Fighter, Elf Mage and Thief at the north, Human Fighter, Cleric, and Human Wizard at the south. Then they pounded on the north entrance. When one of the cultists tried to sneak out the south entrance to spy on whoever was pounding on the door, they came face to face with the Human Fighter, and it was on! The battle went pretty heavy in the PCs favor, since they were 4th level. Just as they almost had things wrapped up, I rolled a random encounter: natural 20. The dragon roared and appeared to perch on the tower.
At this point the PCs were thinking, Get in the house! The group at the south entrance killed off the remaining cultists there, and began running inside the house on their turns. Three cultists were still holding the north entrance shut, although they'd pulled the thief into the building through the window. The Elf Mage Magic Missile-d the cultist grappling the thief, killing him. The thief then quickly dispatched another. The Halfling fighter tried forcing the door open, but the remaining cultist held it tight. Venomfang took flight and headed for the house. On the Elf Mage's turn, she jumped through the window (barrelling over the Thief in the process). The Thief got up and dispatched the last cultist. On the Halfling Fighter's turn, he had a choice: try the door again (he didn't know the cultist holding it had been killed), try jumping through the window, or trying to hide in some other ruins.
Had he jumped into the window, or forced the door, probably nothing further would have happened. Safely ensconced in the house, the party would have kept quiet while the dragon flew elsewhere to look for food. Perhaps they would have had the opportunity to raid its lair. Instead, the halfling made for the nearest ruin and attempted to hide in a tree there. He rolled a natural 1 for Stealth. Venomfang arrived on the scene and immediately perceived him. He alighted on the tree in an attempt to grapple the halfling and take him back to his lair. STR vs DEX contest. The halfling rolled a total of 5, to the groans of the party. Venomfang rolled...a 1, for a total of 5. With a tie result, the grapple continued, with neither Venomfang getting a firm grip, nor the halfling escaping cleanly. But this was actually a good thing, because it spread the party out.
The Human Fighter, always spoiling for a fight, ran out the building and up to where they were. The others began taking shots at the dragon from the house windows, steadily wearing it down. On the halfling's turn, he made a clean getaway, so the dragon turned towards the house, went up to the window and let fly the breath weapon. Most of the party had already moved from that window, but the Elf Mage was still hiding in the room. She failed the save, and went down. By RAW she'd be perma-dead, but my houserule is that if you take more than double HP, you start making death saves with two failures. Then the dragon turned his attention back to the human fighter. While that was going down, the cleric used Spare the Dying on the Elf. The others continued taking shots at the dragon.
The dragon hit the fighter with its bite-claw-claw: hit-hit-critical. The Human Fighter went down. His turn was next, and he immediately failed a death save. Another round from the rest of the party, and the dragon was just a couple hits away from half-HP. On its next turn, it grabbed the unconscious, dying fighter, and took to the air, heading to its lair. The race was on! On his next turn, the fighter rolled a death save, and rolled a 20. I don't know how he does it, but he does it a lot. However, his attempts at attacks were for naught. The dragon made it to its lair, where it let go of the fighter and him with another bite-claw-claw. Again the fighter went down. The rest of the party arrived shortly after, and burst in...just as the dragon's breath weapon recharged.
The party quickly went to work: the Cleric dove down to the Fighter and did Spare the Dying. The Human Mage, all out of spells, took his Staff of Defense and stepped to the Wu against the dragon, earning Inspiration. Thief attacked, and ranged-fighter attacked. Together they knocked Venomfang down below half-way, so he took flight. At the top of the tower, though, as a parting shot, he breathed poison gas again, and took off. Since it was a 30 foot cloud from a 40 foot height, I said it was half-damage, save for none. Everyone but the thief saved, so the thief, already hurt, dropped. Not a problem, though, since the Cleric was still up and could stabilize her.
The party is currently taking a short rest, and waiting for their downed comrades to wake up again, before heading for Reidoth's place again to take a long rest. They also want to make sure the dragon is gone before they head out into the open, looking for the Elf Mage, who's stable but still unconscious in the cultists' cottage.