On last level of CoC I was given the character Quick Jon. Quick Jon has a "swap" card. I used it to swap my priest with greenfang. The priest and greenfang were right next to each other when the swap happened. The swap caused the priest to vanish from the board (but not die). The game continued with the priest drawing cards, but not being allowed to play any, not even traits. Even with the other two characters were dead, the game continued. The monsters sat there doing nothing. Here is screenshot, priest is absent from board. I suspect the 2x2 monster overlapped the priests new location after the swap.
Hmmm, I wonder if the reverse situation would have occurred if your priest had been standing in a square where a 2x2 figure couldn't fit (i.e. north of the lava or south of the water). Then you could have been the last one left on the board, but without any way of achieving victory. I must say I feel really bad that this was how your CoC run ended, but it's a hilarious bug within itself.
There is a check with swap to make sure a 2x2 figure doesn't get put into a space it won't fit in, I did some testing after I got Quick Jon in CoC and wondered what would happen (I was to scared to actually try it during CoC though). It seems like something is not being checked, did you target the dragon first?
I've been testing this swap bug a bit. I found out that if a small character is swapped with a big character which main square is 1 step north, east or northeast from the small character, the creature that is selected 2nd with the swap skill vanishes from the board. The creature still exists, the same way as when you turn a spawn point into blocked terrain when creating a map. Once, I even saw a creature "phase out" while it remained on the board (swap was not involved, I think it was a big creature and had something to deal with respawn) but I have not looked into it yet
Does it matter which one you select first? (I.e. if you change order of selection of the 2x2 and the 1x1 figures with swap would it be the big figure that disappears?)