[This whole place is inexplicable to Bard more often than not, but enough things have been successfully explained to him at this point (and the idea of being stalked by a dragon only he can see until he goes mad is unpleasant enough) that he's willing to entertain possible alternatives.]

He lingers in the fireplace. Whenever I get close enough, he breathes fire in my direction, but the scorch marks vanish if I look elsewhere long enough. Back home, even after I killed him the effects of his lingering malice soured the heart and mind of one who had been by all accounts honorable all his life, so if this isn't truly him someone is providing a very good imitation.