Board Thread:Lore Discussion/@comment-10167444-20131113061509/@comment-6003396-20131114021742

The Undead Dragons that are encountered are intact to begin with – they have both torso and legs. The one in Valley of Drakes splits in half after its been awakened and its legs fall into the Valley, and the one in the Painted World rips itself apart.

The source of the legs in Izalith is an interesting question, though. I once thought that the legs in Izalith were what were left of some of the Everlasting Dragons after the war, and that they somehow became reanimated. Perhaps after the first flame was linked it affected the remains of the Dragons in a similar way that it created the Curse of the Undead in humans. Unfortunately, since we are left with no in-game lore on the subject, we can only speculate.