Ok, so reload, the same thing happens, except this time I strike a guard. I immediately receive a 40 Septim boun ty for accidently hitting him with my sword, but apparently Law and Order in these parts are a tad less insane than other parts of Skyrim, because as the gaurds surround me, I sheathe my sword and they go back to fighting the Dragon. (That's actually the only intelligent thing I"ve seen the AI do other than some fights with Giants) I learned later that a 40 Septim bounty is easily payable, and I finally pay the small fine and leave Falkreath. That's what I get for saving a village.
On the other hand, selling the Dragon Bones and Scales more than made up for the fine, so I"m all happy with it.
