The children's book Drekasaga, translated to English by Ingólfur Steinsson. With illustrations by Búi Kristjánsson. Also published as Dragon Story.
From The Good Dragon:
The day when this story really started, the dragon was sitting outside his cave and staring down over Twinkleton. He was lonely and sad. He had no friends because everyone was afraid of him. He had tried to make friends with the creatures higher up the mountain, but they disappeared in a flash as soon as they set eyes on him, just like the people in the village. Everyone thought that he was bad because he was so ugly and full of fire. And they thought he was a kidnapper, which really wasn’t true. He had not kidnapped anyone and had no more idea than the people of Twinkleton what had happened to those missing people. For the dragon wasn’t at all bad. In fact he was very kind, for a dragon. It was just that he had never had the opportunity to show his kindness because everyone was so afraid of him. Ever since he was a little baby dragon he had been lonely and had no one to play with. And he wanted so much to get to know the children in Twinkleton and play with them.
The weather was fine. The sun had almost melted all the snow from the gardens and he could hear the children’s laughter echoing from below.
“I’m going down to the village to talk to them,” he said to himself. “I’m going to tell them that I am a good dragon. Then maybe they’ll want to play with me.”
He unfolded his wings and took off.