Greenslime - is it true that the dragon knows about the party ahead of time? (I could have eaten "stupid breakfast" this morning and completely missed that.
If that is true, then yes, you are absolutely right, you should definitely lower the age.
I am basing all of my posts for this thread from the point of view of DMing and Playing. If I was a DM and I made the Red fiendish dragon encounter as difficult as I possibly could weighing the cunning of a dragon and then the cunning of a dragon whose that old, the amount of treasure such a dragon could have, the amount of allies (read as creatures weaker than the dragon who submit to it out of fear) the dragon would have, the amount of adventurers such a dragon would have killed in the past, etc., I still would fear that the players would win.
Let's first assume the Dragon has time to plan the encounter -
BOOM - PC's die.
It's really not worth talking about. Even if the Dragon is only an adult, it should be able to kill the entire party either in the surprise round or one or two rounds afterwards. Afterall, it could do something as simple as use a wand of Summon Monster V to summon some lantern archons and have them teleport to the party in increments forcing the spell casters to waste all their spells. Send in some of the weaker allies and basically drain the group of their daily resources. Then once the PC's have destroyed every last enemy and think they are victorious with half their party unconscious just show up and breath on them. Also, the irony of killing a Paladin and two presumably good clerics with lantern archons would simply be too cool from the Dragon's point of view.
Therefore, the Dragon can't have time to plan if the DM wants to avoid a TPK.
Let's give the PC's time to plan - well, pretty much the same thing as when the Dragon plans except vice-a-versa. They all cast ghost form, enchant all of their weapons with ghost touch (for the relevant fighters in the group) all have protection from fire on. All have stone skin, all have shield of faith, recitation, bless, blur, all the wizards will have shield and mage armor up, every one will have expiditious retreat, etc. etc. etc. Finally get em all hasted, teleport in with a teleportation circle (only after scrying on a fly that inhabits the dragon's dung to make sure there is no contingency set up if someone teleports inside) Once they are in and next to the unaware dragon do the harm/magic missile combo and poof their goes your advanced Great Wyrm fiendish Red Dragon with Character levels. (btw- I am going by PHB/core rules, yes - I presume all rules are being used as written/errated).
Therefore, it seems that the only way this encounter will be worth anything is both sides are caught unawares or are only given a short prep time. In this case the battle between the two groups favors the PC's even if the Dragon is a great wyrm.
Btw - Green slime, if you DMed fairly (which I am not making any assumptions about for or against) I will tell you that if you pitted me controlling 8 16th level PCs against a Red Great Wyrm, I could drop it in the surprise round. This obviously assumes I was given time to plan. But, believe me, at that level with that many players, there is no way anything except Gods and possibly some epic characters can survive a surprise attack by the 16th level group - I will promise you that.