More good replies. As for why is it out on it's own? Well, it says that younger/less intelligent Evil Dragons tend to lay clutches of 1d4+1 eggs around the countryside. This one would have been part of just a 2 egg laying and I was thinking that it killed it's sibling off in a fight over food or some such. It then relocated to where it currently is, in the kobolds cave. It strode into their lair and told them that it was taking over and they could either accept that or be roasted dinner. They of course accepted and the Dragon made his way down to the lowest portion of the cave.
This also explains why the Dragon can't fly around too much, as the cave that he is residing in isn't too big. Maybe 20 foot at the most, with the way out being through the 10 foot tunnel that led into it. The kobolds are working on excavating the Dragon's "lair" out to make it bigger. This could give me a reason to have a few kobolds in the lair as well.
The Dragon will smell the humans and elves coming, thinking that his kobolds had captured them and where bringing them to him as a present, he will speak out to the kobolds about what a good job they did. (the Wizard that speaks Draconic will be the only one who understands this)
Upon seeing the adventurers stride into his lair, he will be so angered (A- that they got into his lair, B- that his kobold worshippers failed him) that he glides down off of his perch infront of them and just starts madly attacking with his melee weapons. (This means only the people who are *suppossed* to be in the front will take the initial brunt of the dmg)
From there I'm assuming that the PC's would want to surround him/spread out a bit. Seeing how the fight goes from there I can decide when to let loose with the breath weapon. Remember, Red Dragons try not to obliterate with their breath weapon for fear of hurting treasure. I figure once the PC's get it to half HP he will start letting loose with the breath weapon. (I'm going to make it a Wyrmling)
Perhaps I will make the cave only 15 feet high. That way the Dragon *can* still take to the air, but it won't be "out of reach" of the PC's. Considering they are 5 feet tall, and threaten the 5 feet square above them, that counts for 10 feet. Then they just have to use the Jump skill in concert with their attacks to jump up the extra height to hit the Dragon (that IS possible in the rules, yes? They just make their attack at the hieght of their jump) All the while the Bard and Wizard is lobbing arrows/bolts into the thing, it might make my fighting types think about getting reach weapons, and the Dragon can't be physically attacking the PC's at this point (unless it "redies" for when one jumps up at it)
How does this sound?