I also think the dragon could be used for such drafts like you describe, although that should not substitute for writing DRAFT on the document, but instead the dragon would be in addition to writing DRAFT on the document (perhaps in the header and/or footer, since the dragon means not room for that in the middle of the document). Both the DRAFT label and the dragon (or other pictures in the watermarks) would only be used in drafts and both omitted for the final version.