ToME WikiI suggest replacing the Royal Jewelry shop in Gondolin with the dragonsmith. The dragonsmith can take dragon corpses or hides (which could be hacked off of corpses) and transform them into armor for a high price. And all dragon armor could be made much more rare.
Smaller dragons can be turned into dragon shields, helms, gloves, cloaks and boots. The resists given should be a subset of those that the dragon had. So boots made from a baby red dragon would have resist fire, gloves from a mature multi-hued dragon would provide some basic resists.
Ancient dragons and wyrms can be turned into dragon scale mail as well, and there could be a chance that armor from Great Wyrm of *foo* would provide immunity to the appropriate element.
For all items generated this way, the level and chance of ego should be based upon the level of the dead dragon. Probably by setting the dungeon level of the item equal to to the level of the dragon.
An additional feature could be a set of artifacts made from the corpses of unique dragons.
LordEstraven: I LOVE this idea! 
nobody: maybe add a quest, dragon raid, consisting of a strike force of dragons sent out to eliminate this pesky dragonsmith