Flew up where?
If he's close enough to attack with a reach 2, any fighter worth his salt could jump up and smack him with a weapon.
Plus, you can ready an action to attack the dragon when he attacks you. I mean, he's biting you, right? That means he's thrusting his own face toward you. If that's not a valid target, I don't know what is.
It didn't fly "up" anywhere in a literal sense, more in the sense that you "run up to someone". It beat everyone on initiative. Then it moved from the center of the room to the 10' wide hallway where the party was standing, breathed on us for 15 points (hitting 5 out of 6 people), hit us with a free action Fear aura (stunning 3 out of 6 people), action surged, and then attacked the rogue 3 times (dropping him).
The fighter and the wizard was stunned and couldn't do anything on their turn. The ranger shot him, action surged, and missed with his daily power. The cleric and the warlord healed people, and the cleric missed with his daily, and the warlord got hit moving up to the dragon. The rogue was up at this point. The fighter and the rogue saved against the fear, weakness, and slow effects. The wizard did not.
The dragon breathed again (for 19 points, I don't remember exactly who got hit), moved away, and the rogue and the fighter moved to engage, the fighter action surges, and misses with his daily power, but is able to get into flank position with the rogue. He also spends a 2nd wind. The cleric and the warlord healed people (they are now out of minor action healing surge powers), and missed with their attack powers (a daily and an encounter). The wizard and the ranger did ranged attacks, doing signficant damage.
The dragon attempts to move away to go after the ranger, but the fighter hits him with his combat challenge attack, and then the OA-stopping his movement. The dragon then breathes again on the warlord, rogue, and cleric, and spends an action point to attack the fighter - hitting 3 times, an one of them a crit. A total of 30 points. The fighter drops, and the rogue is now unable to flank.
After that the dragon pretty much dropped 1-2 people a round, chasing down those who tried to flee.