About two out of five times when encountering a dragon I end up with something that makes http://i.ytimg.com/vi/Iq-SASaYUFQ/hqdefault.jpg look "next-gen"

Nothing else in the game does this happen to - is this a thing?

Is that dragon type from a mod? The background looks very moded, so is it possible that the mods adds a different dragon type and it's not rendering properly?

That's common, the game fails to load the proper meshes and textures for the dragon, and instead uses the LOD model that is supposed to be used at long range.

I have used a mod in the past that disabled LOD models for the dragons, meaning they should always use the best models, but i believe that resulted in http://images.akamai.steamusercontent.com/ugc/612775452663668283/D217F0B32D15A8E2993004F122E29ABED880D183/
Well, that made for interesting fight, for once

Haha! No. It's from the '97 game, Tomb Raider 2 - I was just making a comparison (do you not recognise blocky Lara?)

Yeah thought that was the case, as soon as the dragon has been vanquished it renders to its proper graphics.