I seem to be stuck somewhere in the middle of that first dragon quest arc.
It sort of seems strange, but I still have the report to the dragon, and do everything he says quest.
I have, and i cleared out the wretches (the ones in their fortress), found the scouts, and gotten the papers. I killed some lizards, explored the entire dragon cave basement thingy (talking to both the surprisingly cordial daemon and second dragon). I got the book for that sorceress.
Right now, all I have, in addition to the aiding Z-dragon is the blue ore quest, and I cannot find anyone else who wants to give me a quest to continue.
Everything is like, "come back later, I am sure to have things for you to do then."
I did encounter that spy guy at the entrance of the dragon area (in the previous area). And I think he gave me a quest when I agreed to do spy for him, but I do not see any quest for that now, and I never met him again, as far as I remember.