What is this weird creature hanging from the tree?

Hint 1 of 11:

Are you talking about the half dragon, half opossum critter?

Hint 2 of 11:

Have you talked to it a few times?

Hint 3 of 11:

Did you notice anything unusual about its speech?

Hint 4 of 11:

Or what it is doing on the tree?

Hint 5 of 11:

This creature is a dangling participle.

Hint 6 of 11:

Talk to the Bookworm on the Isle of Wonder (past the gnomes).