I also just realized the dragon has skirmisher/controller hit points, not lurker hit points.
Tried the fight again with a completely different second level party, Dwarf Warden, Half-orc Rogue, Drow Sorcerer, Goliath Runepriest, Human Invoker.
Changes I made were to turn Shroud into an encounter power, and make it so you could end the effect on yourself as a standard action (no check), or on an adjacent ally with a DC 10 heal check.
The fight was really close. Warden's resist 3 form, and Runepriest's resist 2 to allies, stone's endurance at the right time, and -4 penalty to damage rolls made a huge difference in this fight. However very close to the end when the dragon was down to 8 hit points, the instinctive devouring ate the warden, and a recharged breath (the only recharge the whole encounter) reduced the remaining PC's to acidic goo, and the dragon was victorious yet again.
There definitely needs to be some more tweaking if second level PC's are to be able to take on this dragon. The Warden/Runepriest combo was nearly perfect for this fight. And I've been running these fights with fairly optimal PC's, assuming a fresh party, which is not even always going to be the case.
I'm wondering if this dragon may be a more appropriate challenge for a party of 6 rather than party of 5.