Specifically, I think there is a false induction because it is ignored that all dragons know for absolute certain that all other dragons can see at least 98 GED. Regardless of how many know-levels (he knows that he knows that he knows…), none of these dragons will imagine that any dragon thinks there could be less than 98 GED.
Simplify it and consider 4 dragons.
A dragon doesn’t know whether there are 3 or 4 GED.
Suppose he thinks there are 3. That means that all the other dragons see 2 GED: the other dragons might consider there are 2 or 3 GED.
That’s the end of the line: we can’t trace it further to the case where a dragon might posit another dragon posits there is only 1 GED, because we know for a gold-standard fact that every dragon knows every dragon knows there are at least 2 GED.
If you drop it to 3 dragons, then it works.