Turns out that i had the same problem too. I finally managed to fix it. There was some new info on Dragonica News for IAH games. Heres the step by step process
First off, reinstall Dragonica. (When you install Dragonica, in the end it has a checkbox saying launch Dragonica. Uncheck it and finish.
Second, go to Dragonica News
and follow those instructions.
Third, Play the game, problem should be solved.
Tell me if this works or not o.O