In The Hobbit: The Desolation of Smaug, Thranduil
angrily tells Thorin not to speak of dragon fire, then reveals a vision of half his face burned away.
The conversation implies that Thranduil has been in battle with a dragon. Considering that he leads a Silvan kingdom far to the east and south of what was once Beleriand and Angband, and there is no record of Smaug having visited the Woodland Realm, when and how could Thranduil have experienced dragon fire?
There are other dragons Thranduil could have encountered. During 'An Unexpected Party', Thorin says
There were lots of dragons in the North in those days, ...
where 'those days' refers to the reign of his grandfather Thror before the sack of Erebor, and 'the North' refers to the Withered Heath. There is also relevant material in the Lord of the Rings. In 'The Shadow of the Past', Gandalf says
It has been said that dragon-fire could melt and consume the Rings of Power...
and also
Seven the Dwarf-kings possessed, but three he has recovered, and the others the dragons have consumed.
Hence, Smaug was not the only fire-breathing dragon alive after the forging of the Rings of Power. Thranduil's realm is mentioned at the start of Appendix B (The Tale of Years), so we know it dates back as far as the early days of the second age, some 15-1600 years earlier.
There's evidence that Thranduil may have lived in, and have been a survivor of, Doriath in the First Age. The original long entry for SA750, given in HoME 12, reads:
Remnants of the Telerian Elves (of Doriath in ancient Beleriand) establish realms in the woodlands far eastward ... The chief of these were Thranduil...
Naturally the timeline was subsequently altered, but it's unclear if Thranduil's past was lost owing to compression (a point which CT touches on in his commentary) or rejection.
If we accept compression, then following the Ruin of Doriath he would have been part of the Elven colony at the Mouths of Sirion and/or on Balar, and would have seen dragons in the War of Wrath.
Update - 2nd November 2014 - in the commentary to the extended edition, Jackson begins saying "Thranduil's had this encounter with dragons before, his wife was..." before being cut off. It's also remarked that this was "a conceit we came up with, because actors need that to feed on, a backstory". Obviously we don't have this backstory expressed explicitly in the movie itself, but that's evidence that it does exist.
Update - 17th December 2014 - in the third movie, the "his wife was..." comment is made clearer. Thranduil's wife was killed at Gundabad, which comes up in a conversation between Legolas and Tauriel. There is however no mention of the manner of her death, but we can deduce from combining this with the DoS extended edition commentary that dragons were involved.
It is possible that Thranduil lived in Doriath during the War of Wrath. However it is very unlikely that he would have participated in the Battle of Unnumbered Tears or the final battle when the Valar and host finally defeat Morgoth. In the former the dwarf king kills a dragon as it crushes him. In the latter winged and non winged dragons appear as a last reserve for Morgoth and bring great destruction on the host of Valar and great eagles before they are defeated.
So it could be that the surviving dragons of the last battle were scattered in defeat and possibly one or more of these could have ended up near Thranduil at some point.
However I think it is far more likely this is just a liberal representation in the movie of the great battles and woe experienced by the ancient elves. Just hinting to the non-read movie goers that elves had in fact fought dragons and many other horrific creatures through the millennia. Much the same way the elves showing up at the battle of Helm's Deep in the movie adaptation of The Two Towers was just a representation of the elves involvement in the War of the Ring.
Thranduil also participated in the War of the Last Alliance and barely survived an ill-advised assault his father undertook:
...also they were independent, and not disposed to place themselves under the supreme command of Gil-galad. Their losses were thus more grievous than they need have been, even in that terrible war. Malgalad and more than half his following perished in the great battle of the Dagorlad, being cut off from the main host and driven into the Dead Marshes. Oropher was slain in the first assault upon Mordor, rushing forward at the head of his most doughty warriors before Gil-galad had given the signal for the advance. Thranduil his son survived, but when the war ended and Sauron was slain (as it seemed) he led back home barely a third of the army that had marched to war.
Any serious injuries that Thranduil sustained are most likely to have been inflicted during this conflict, as it is the only one that Thranduil's involvement is explicitly mentioned. However, I do not remember any explicit mention of dragons participating in the War of the Last Alliance. Therefore, I suppose that the (supposedly) dragon inflicted wounds are just film fiction.
Some people believe that Dragons were not active in Middle-earth beteen the War of Wrath and Third Age 2570. Since the Second Age lasted 3,441 years that is a span of approximately 6011 years. But the first paragraph to the introduction to the third age in The Tale of the Years in Return of the King says:
...The Dwarves hid themselves in deep places, guarding their hoards; but when evil began to stir again and dragons reappeared, one by one their ancient treasures were plundered, and they became a wandering people. Moria for long remained secure, but its numbers dwindled until many of its vast mansions became dark and empty...
This implies that Moria was the last of the seven capital cities of the seven Dwarf kingdoms to fall, in TA 1981, and that all six of the others were captured by dragons. certainly four of the 7 rings of the Dwarves were melted by dragon fire so at least four Dwarf kingdoms were destroyed by dragons,presumably before TA 1981.
in Third Age 1977:
Frungor leads the Eothed into the North
Appendix II "The House of Eorl" says that Frungor's son Fram:
...slew Scatha, the great dragon of Ered Mithrin, and the land had peace from the long-worms afterwards...
So Scatha had a hoard of gold stolen from Dwarves by about TA 2000, and possibly centuries earlier.
Who is to say, or even know, if in his young years he led or was part of an expedition that came into contact with some dragons up north? He didn't even have a name in The Hobbit book and the history of him isn't written about in too much detail. Having been born in Doriath, this puts him quite close to where many dragons of those northern mountains would have been. It's easily plausible to say that he came across a dragon on an expedition and was injured by its fire breath.
Also even if he was not too old while in Doriath, after the fall of it (in the S.A.) they traveled East, meaning they came into contact with more mountain ranges (the blue mountains). Knowing that two of the greater dragons Smaug and Scatha came from the Withered Heath, it wouldn't be hard to imagine them travelling the short distance west to the Blue Mountains.
Lastly with all Dragons basically having come from Morgoth, they'd have left Angband and gone in many directions meaning many of those mountain ranges in the region of Doriath and the rest would probably have housed their fair share of dragons.
During the "Do not talk to me of dragon fire for I have felt it's wrath and ruin" quote, he isn't necessarily saying he's fought dragons, but that he has felt the consequences that dragons bring.
Essentially all the dragons known to exist after the First Age (that come into the story) dwelt in the mountains immediately north of the Woodland Realm of Mirkwood, the Grey Mountains and the Withered Heath. These include Scatha, a "cold drake" and the "many dragons" that attacked Dwarf settlements in the region.
Assuming Thranduil ever left his realm to do battle, which we know he did, I fail to see how it's any stretch to imagine he encountered one of those. There seems to be a lot of stretching going on trying to imagine where else dragons might have existed when all the dragons in the Third Age are right around the Woodland Realm.
What's improbable is that PJ would have introduced it as a hanging plot thread in a character who obviously wasn't injured by dragons in the book; but then, Thranduil was green in the (superior) cartoon version, so...
King Thranduil is described as having lived in the original Elven city with his father which would make his birth in the first age. In that light it seems likely that dragons would have been more abundant and in sheer speculation I would imagine that the elves would have done battle with them at one point or another. Since Thranduil is a son of kings it would be more than a good chance he would have been some brand of warrior and present during any significant conflict. Thranduil scare reappearing may simply be that since dragon fire is magic it cannot be fully healed and therefore he conceals it with some sort of glamour charm. Most people seem to have this questioning as to how Thranduil would have such a power but if he's as old as the scriptures suggest " first age" it seems likely that he may have developed unusual abilities not common to lesser elves. Galadriel for instance can somehow magically appear out of thin air, and Elrond seemingly has the ability to see the future so I can only surmise that Thranduil being every bit as ancient as any elf in existence had developed some illusion based magical abilities which would seem fitting since Mirkwood can disorient the mind.
There is a lot of dragons left in Middle-Earth, in the mountains. They were mainly drakes. How he got the scar was he went in the mountains an tried to slay a fire drake which burned his face.
