Ran a dragonfight last night in my 4e Loudwater game - no fudging - PCs lost. The players of the two survivors were very happy at their exceptionally narrow escape, resulting from consecutive '1's on the dragon's attacks as it chased after the last standing PC, the Wizard, dragging the body of her unconscious Ranger friend. The other three players were sad to lose their PCs, but are looking forward to their new characters. Overall I'd say it was far better than if I'd fudged to nerf the dragon.