Ok: here's how I did it.
1. agree to transport the dragon's essence.
2. You'll want to load up the area around the dragon with as many traps as you can (6)
3. You'll then walk around the dragon and kill the two adds in the room. Doing so will lock you in combat but will not cause the dragon to attack you. (this is a good thing as you see)
4. Walk everyone back into a little corner and have someone summon a monster to start the encounter. You'll want to angle these summons to set off the maximum number of traps before your party gets involved.
5. I created a handful of revival and flame wall scrolls.
6. Once the traps are set off, attack the dragon with one more summon to turn it away from your party.
7. Use every flame wall and aoe spell attack you have (my screen was crisscrossed with about 10 of them).
8. Wait. The dragon will turn around and decimate you, someone (usually kana) will survive. Use the revival scroll and go at the dragon some more.
9. Keep going and you can and WILL eventually take down the dragon.
Your reward will dragon meat and some scales. Not sure if it was worth the hour of figuring out a way to beat the dragon, but who cares!
