You need to go into the place beside Dibbler in the Square. There should be a stone troll and a crying blonde woman. When you go up the stairs after waiting for a short time, you will be told to lie down on the couch. The guy talking to you will give you the paper you need for free. Now go back to the palace and use one of the peices of paper on one of the guards. Remember to get the bin from the side of the University and the bubble bath from the inn. Use the bin on Chucky and then the bubble bath on the bath in the other room. Now you can get the hat on the hat stand to give to the dragon.