I was easily able to clear out all the adds, but the dragon itself is just impossible to take down as all my attacks miss. I play on Hard.
You can "cheese" the start if you move your party to the left BEFORE starting the talking encounter, and then sending a pet to the right to start the encounter. The pet will go back to its owner during the talk, so basically you will have full control of your party once the talk ends, and you will not be in combat yet.
Now all you need to do is send the pet all the way upwards and aggro something, then pull it near your party and nuke it. After the first pull succeeded, you can just keep aggroing with the 3 summoned Skeletons that Kana provides. They are free, and if the pull goes wrong you can make them again for free.
Once the adds are dead, it's just a matter of kiting the dragon around. Move your party to avoid the breath attack (its AoE is HUGE). Keep spamming 3 skeletons and send them at the dragon ONE AT A TIME, so that it will focus on that skeleton alone while you shoot it from afar.
Problem is, I arrived there at lv8 and every single one of my attacks missed. The only time I managed to hit was after I stealthed with my main (rogue) and did a sneak attack on the dragon (which dealt the beauty of 5 dmg). I could keep kiting it no stop, then I just gave up. Guess like this encounter is just a big stat-check.
Oh, if you employ my tactic, keep your eyes on your party. Sometimes, your companions tends to get "pulled" towards the dragon, so be quick at issuing the commands to go back. You do NOT want to aggro the dragon before you clear the room of the adds.
Anyway, I've just completed the quest that "debuffs" the dragon. Too bad that now the dragon now got glitched and I am unable to target anything in the room :/