[BB Shockwave]

Yep, Royal Griffins get bad morale when Dragons are present (-2 actually). There is a Mind skill that raises neutral troop (animals) morale, so that's the only way you can counter-balance this. I used Tirexes instead of dragons to avoid this problem. (HINT: When you get Birth of Giant scrolls, save game and travel to different islands before using them. It is pre-set what they give you, but you get different troops on different islands).

Regarding spell changes questions from various people, here are the biggest changes:

-Gift, Last Hero (it was useless anyway) are gone.
-Oil Cloud and Shroud are merged into one Distortion spell now and it is more powerfull in the archer damage reduction too.
-Battle Cry is a mass spell on Level I already (very usefull for a warrior)
-Magic Shackles is leadership-dependent now, meaning it won't work on troops above the set leadership amount. In my walkthrough on Normal, this was never a problem but I guess it will be harder to use on Impossible due to larger enemy armies.
-There is a Summoning skill that improves the abilities of summoned units, maybe it's just my experience but this seems to affect the HP and damage of the Phoenix and the Evil Book too, as they are more effective now.

New spells:
-Create Evlin (Chaos) :transforms a corpse into an Evlin, if any unit steps on it a % of them dies instantly and the unit loses that turn. Undead are resurrected though. Evlin can even move 1 space and enter a unit next to them at the end of a round, but they can attack your own troops too. Use the Dragon's kick ability or headbutt to push enemies into them, but AI usually waltzes into them anyway.
-?????? (Distortion) - not sure what it will be called in english: Does great damage to Undead and demons, and double damage to summoned units. This includes not just phantoms but units summoned with gremlin towers, dryads, etc...
-Transfer Rage (Order): Transforms a percentage of Rage into Mana, to a Max of 55 rage into 29 mana (I think). A must-have for boss battles but usefull otherwise too.
-Wake Dragon (Distortion): Wakes up the dragon so you can use his abilities again that round. Costs mana, and the dragon burns a % of your total mana too after use, upgrading the spell minimizes this.
-Death Star (Chaos): Powerfull damage spell, inflicts astral damage (no resistance) on all targets in a star-shaped area. Hard to use without damaging your own units.
-Summon Animals (Order): Instant summon of an Intellect/Leadership size of animals, they can attack on that round. Upgrading it will give you higher level creatures (max of 4) and more leadership
-Avenging Angel (Order): Cast it on your troop, if it is attacked, magic lightning strikes the attacker (works for ranged attacks and magic attacks like shaman axe too). Same as Magic Shield, duration decreases after number of attacks.
-Turn back time (Distortion): Same as Reaper's time back ability in Legend! At max level works on Level 5 too, so everyone except Black Dragons. Important to note that the stack you use it on won't be able to attack twice in that round - worth using it on units that already attacked that round and took heavy damage.