While it'll probably take money and resources to do this...
Allow dragons the ability to use certain flight abilities. Not all abilities on the ground would work well in the air, so there is need for another set for in-flight combat.
Create flying NPCs, and more of the range ones. An in-air dragon wouldn't be able to do much but swoop and flame at an archer on the ground. It's group would have to help out in that regard. However, just as the dragon in-flight couldn't do much for the ground-to-air assault, they could very well take out the air-to-air assault, and air-to-ground assault. (Bird-like creatures, swooping and pecking at group members. A mage would be able to try, but the bird could easily swing high out of range.)
Combat would be based on per-action as suggested. The dragon would get little to no experience for things killed on the ground, however they would get most if not all experience for things killed in the air.
This would also reflect back on bipeds. Unless a ranged attacker, they would not be able to harm air enemies, and thus would only get experience for what's on the ground.
One big thing that would be needing correcting, however, is healing and other spells. Simple enough to register actions done against an NPC during combat. Not too simple to register things such as heals, augments, and other spells that help out during a fight, but don't directly harm the NPC. I also don't think distance should play a factor, unless the biped is completely out of range. That would no doubt be unfair to cloth-wearing bipeds that need to stand back else they become a nice meal. Lastly, getting hit should be consider "action" in a battle as well. That way a tanking melee would get credit, even if he's not able to do much more aside from get beat-on.
-- Xorith