S.L.
It looks like you need to get the dragon out of the toilet and out of your bathrooms! We've also had issues with "imaginary scary creatures at our house. What has worked is "monster spray" or in your case "dragon spray" Since we all know that monsters don't like things that smell nice, we bought some "monster spray" - air freshner - and let the girls spray in the areas that they found monsters.
Since the dragon is in the toilet, what about buying the disks that change the toilet water. (You know, the disks that freshen up the water and prevent ring around the toilet.) Tell her that the dragons don't like the colorful water and you "the dragon slayer" have placed these special cleaning disk into the water to scare the dragons away. Because the dragons will be so scared of the water in the toilet that they will go away forever because they will remember that your house was the scary house with the colored toilet water.