The setting is simple. It is a huge island in the middle of the sea (where most islands are). What is unusual about this island is that it is completely uncharted and a dead-zone for electronics - devices such as cell phones and pagers cannot transmit or recieve messages. No planes or ships come by. It's in the middle of nowhere.
On this island lives a single inhabitant, the dragon Pernas, along with the animals of his island. The animals mainly consist of his aviary, which contains all varieties of birds, free to travel about the island as they please, and his cattle, which, as a dragon, he mainly feeds from. Not as though the cattle mind too much. Death is always quick and painless, followed shortly by reincarnation. Though there are exceptions...
The island itself is very large, as mentioned. The terrain alternates between mountains, forests, meadows, and the like, and large sections that Pernas refers to as 'his garden,' which are fantastical forests of variety of beautiful plant-life that would not occur without a gardener. Though there are no wastelands or deserts amidst the variety of landscapes.
Through the mountains run a series of tunnels which serve as the main dwelling place for Pernas. The tunnels have enough rooms and facilities to support a large extended family, depending on where on the island the dragon wishes to sleep at any given time. The halls are lit by magic crystals that eminate the full spectrum of visible light, as the sun would (though without the blinding effect or scathing heat), and the walls are populated by paintings, scultpure, and other works of art that Pernas has created during his infinite spare time, along with gardening, sleeping, and eating.