As best I can guess, here is the position of the party:
First of all, Ahmet has the crossbow, as suggested. He has a clear sight on the dragon. He does not need to make a save vs. fear. Though he does have the crossbow, the dragon is watching him and the others and initiative will still have to be rolled before the party can attack. (when Ahmet stands up behind the sacks to fire, the dragon may attack first.
Everyone in the party except for Ahmet, Andrej and Frith will need to roll a d20 at the outset. At the moment, the fact that you're not fighting is keeping those dwarves who already feel terror from simply running off (though the book says the "sight of the dragon" is enough, I'm willing to stretch that to the dragon appearing confrontation - which this dragon isn't, right now).
Andrej, Worter has agreed to throw flaming oil with you. Worter cannot, at the moment, see the dragon, but Andrej can. The dragons range at the moment will incur a -2 to hit. A flask of oil's range is 1-3hexes (close), 4-6 hexes (medium) and 7-9 hexes (long). I've put Janos behind Andrej.
The other dwarves are lined up to slide down the slopes to the dragon. Remember that these are 12 foot high slopes, about 60 degrees, but they are covered in ice and you will slide easily. Also remember that ALL movements on the blue level will demand a dexterity check, and failure indicates you've slipped and fallen. You can throw anything 2 lbs. or less from a prone position on the ice, but you must take a round to stand up before you can attack with weapons. It takes a round because it is sheer ice and as such it is slippery. I will let you attack while laying on your back if the creature is directly above you.
Dragons have all sorts of attacks, so don't be certain you know everything there is to know about them.
For this post, I'll ask that you keep your "color" comments to a minimum, and keep to short sentences describing your exact actions and positions. There's a lot of detail to be exact about. Please continue to make casual comments on the previous post - I'll be watching both. I suggest you do the same.