I don't remember (imagine that) being able to kill Xanlosch and Isebelle from dragon form. I went through it twice to be sure it wasn't a 1 time fluke. First I cleared all the towers, as usual. I then flew above the no-fly-zone and dropped in just outside Xanlosch's arena. I moved up to the protruding ledge overlooking the arena, where I had a clear shot at the generator with my (still packing Mr.Shooty) bow. With the gen down, the cut scene starts. After which, both the Lord and Adm spawn. Still at the ledge you can turn, jump and take dragon form. When there are down, you can still engage in combat with Xan and Ise. I wasn't able to target them aside from a quick blip from Ise. If you get too close It will go into the second cut scene, where he summons the two flying bugs but they don't return. You can now get as close as you can. At close range he will result to mel weapon. Beware the dam from either WILL kill you...fast. Dragon Burst done the most dam at 250 to 300, and fire breath was only 6 to 8. It took a while...but MAN WAS IT FUN! Until the new wore off...
EDIT: This is a bug obviously, and afterwards you will be unable to use the Dragon Stone. At least I was anyway, and had to reload an earlier save (before the second/last cut scene) and finish him off by standard combat.
Last edited by SENIOR CINCO; 24/04/11 01:18 PM.