Heh, our approach to the dragon were... different.
We had to deal with him twice. The first time was on the way in. Being a sneaky group, we actually encountered him inside (barely). Our solution: Grapple!!! Yup, we wrestled with the dragon.
That didn't work so well (although better than you'd think), and we got a little dose of his hover. Realizing that he was way faster than us and not wanting to risk combat in open country, we ran inside and down the stairs.
<EVEN MORE SPOILERS...>
We actually found the picks and _mined_ our way through the wall blocking the escape tunnel, giving us a way out that didn't require facing the dragon.
Our pride was wounded, though, and we talked with our patron about the dragon (we're being groomed for something in particular). He managed to find someone who would be willing to keep the dragon from flying and we got a rematch on our terms.
Basically, someone cast several Walls of Force over the Moathouse courtyard at 10', so that the dragon couldn't get a lift-off. From there, it was a nasty fight (no one with a fighter BAB and our only arcane caster is a bard), but we got the dragon.
Pretty sure the DM modified the XP of the encounter, FWIW.