Firstly - have you gotten the Amulet of Ages from the Dryads/Dwarfs?
Secondly - op top of buffing potions (strenght, dex, etc) make sure you get some items with Stoneskin and Haste. These two latter effects will make a huge difference.
Personally - I would take either a cleric henchmen or a meele henchem into that battle, and neither the thief nor the sorcerer.
If you take a meele henchmen (Daelan or Grimgnaw) - make sure to give them some buffing potions also.
Also - effects to counter Fear would be good, so make sure to have that up.
Also - what weapons are you using + Armour - is there something better you could use for this specifically dragon? Such things should you look at also.
If you truely can't kill the dragon, an option for cheating would be to use the console command to try and spawn in "Cows From Hell" a couple of times (enter the console, active DebugMode, then enter console and type dm_cowsfromhell) - That should kill the dragon - I think - have only ever tried them on ordinary NPCs

(Don't know if they will kill your henchmen also)
( Not that I really condone of cheating, but it is a single player game

- so better to cheat to move on then be helplessly stuck. )
Insert signature here.