Hmm I really am wondering where I saw that. It was on a site showing things that could have been in the game. And the Museum doesn't have it. Wait.. I think the website showed a picture where there is a sprite of the daedra lord Peyrite inside a city wall. The dragon-like daedra lord. Maybe it was The Essential Site?
It's amazing how cryptic most pre-release Daggerfall media has become. I'm not sure about that screenshot, but there are two that have continually eluded me - http://uesp.net/wiki/File:DF-SS-Army.gif and http://uesp.net/wiki/File:DF-SS-Camaron.gif, depicting what I believe to be the Battle of Cryngaine Field. I originally thought they were scrapped videos from the game, but the UESP page says that they were actually part of a promotional cutscene shown during the CES (Consumer Electronics Show?) many years ago. Do you know if the video, or any other screengrabs of it, may yet exist?