This is super intense! It took a few tries, but I managed to full combo hard mode :D
I really like how the dragon falls asleep, making it a little easier at the end. Makes it feel like the gameplay has a real effect on the game world.
For some feedback, I played with the mouse controls that you called "cheese" in another comment. I really like the mouse controls, although it would be nice if the notes changed just based on mouse height, so the player can focus less on input and more on the notes. Having a sound effect to telegraph the dragon attack would also be nice.
Very cool spin on a rhythm game, good job!