Another little trick you can use is to cast "magic resistance" on him. Since you have the wardstone (I am assuming) you can get close to him w/out him turning red. Then have aerie (if she is in you party???) cast magic resistance. A bug in the game allows for this to replace the dragons natural resistance with the lower spell cast resistance. This opens the dragon up to magic missile, acid arrow, flame arrow, etc...
The way I beat him was to summon monsters to take the brunt of the physical attacks and then have my players just run around and blast him with missile weapons and spells! I know it is a bit cheesy but it beats the hell out of going toe to toe with a dragon
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Never try to teach a pig to sing; it wastes your time and it annoys the pig
I've got to admit it's getting better, it's getting better all the time