For the players still standing (or smouldering) you could say you've been a little unlucky. Had either of the two 15s rolled by clerics been rolled instead by fighters, that would have been two hits. And The Herald was, perhaps, unlucky to roll a 1 for damage... three "average" fighter hits might have killed the monster... or at least severely weakened its breath weapon!
On the other hand, the players have broken up into three groups; those that went back looking for oil, those that still loiter in the passageway, and those that attacked the dragon regardless. Probably not the "ideal" way to confront a dragon, but that's what happens in PBP games. A story to tell, at the very least... And it ain't over yet!
the Elf Medium (MV 12", AC 9, HD 1, hp 1/1, AL N) great cloak, lantern
; spells: color spray; scrolls: sleep, sleep, charm person
Hirelings: Georges; torch