IF anyone is finding this battle as ridiculously unfair as I am I found a great glitch. Climb down the rocks. Send your entire party to the west into the small alcove. except your strongest figher. Let that person do the talking. The dragon will only hurt him with his totally unfair breath. Have every character summon something. Give all your non magical characters the items that summon things. Have your mages, chanters, Druids etc use their magic. For good measure cast a wall of fire type spell.
The dragon will also summon some of his minions.

Every once in awhile I had it happen at least twice. Something overloads and the enemies stop moving. The dragon and his minions will all freeze and you command everyone to pound on him and go make a sandwich. The only catch is make sure you destroy any Goblin Shamans as they might be on heal glitch loop which will [prevent the dragon from dying} I had this happen twice and only realized the first time that It wasn't a glitched health bar it was an actual spell in a loop. So kill him.

I'm not sure if this will work for everyone, but protecting your party from that initial blast while they buff up and gather minion isn't a bad gambit. I think It would have worked for me had I played it out, but I couldn't bring myself to reload after the Dragon was gift wrapped. How do I know it wasn't the ghosts of the many men it had slain coming to my aid? At least that's what I'll tell myself.