I say it how the norse would have said the same word: drog, which should rhyme with dog. The first r would "roll", like it would in Spanish, and the r at the end is silent.
We have a winner!
from http://answers.yahoo.com/question/index?qid=1006032806369
Based on the rules of Old Norse pronunciation it would be "drog," rhyming with dog, with a trilled R. The R would be as in Spanish or Southern German - like a drum roll with the tip of your tongue against the roof of your mouth. The final R is silent, according to the rules.
From http://en.wikipedia.org/wiki/Draugr
A
draugr,
draug or (http://en.wikipedia.org/wiki/Icelandic_language)
draugur (original http://en.wikipedia.org/wiki/Old_Norse_grammar
draugar, as used here, not "draugrs"), or
draugen (http://en.wikipedia.org/wiki/Norwegian_language#Nouns, http://en.wikipedia.org/wiki/Swedish_language and http://en.wikipedia.org/wiki/Danish_language, meaning "
the draug"), also known as
aptrgangr ("afturg?ngur" in modern icelandic) (literally "again-walker", or "one who walks after death") is an http://en.wikipedia.org/wiki/Undead creature from http://en.wikipedia.org/wiki/Norse_mythology. The original http://en.wikipedia.org/wiki/Old_Norse_language meaning of the word is http://en.wikipedia.org/wiki/Ghosts_in_European_culture, and older literature makes clear distinctions between sea-draug and land-draug. Draugar were believed to live in the graves of the dead, with a draugr being the animated body of the dead. As the http://en.wikipedia.org/wiki/Grave_%28burial%29 of important men often contained a good amount of wealth, the draugr jealously guards his treasures, even after http://en.wikipedia.org/wiki/Death.