Eldurin, bravo! I agree wholeheartedly with what you said. For example, how did H'Thark make it over to the Serpent Temple? Tickle the middle oracle until she let him by?
Regarding the enchanting of the armor: I agree, it should work...but there seems to be an invisible barrier there that can only be breached if you're wearing the Dragon Armor. Similar barriers exist in the Serpent Temple (after going down the Chute to find the Serpent Master; you can't return up) and in Skull Castle (try swimming back down the same way you came after you get the Bone Key or find Adrianna...you can't.)
Allegedly, some people have done it, and maybe the barrier can be breached if you have fire resistance of 80% or more...but enchanted rings, etc., could be used for that as well. I don't know if it works every time.
Frustrating! Ah well..
-Sazerac