I think with creative interpretations of the prompt, you run the risk of one or both of the judges not agreeing that it meets the requirements. It can be up to the judges personal interpretation or current mood. You just never know! That being said, I don't think it should stop you from interpreting the prompt this way though. I like it when people stretch the interpretation of the prompts.
I personally like the fly riding the dragon. I think it's really funny that a flying creature would want to free ride off of another faster flying creature. The way you are zooming in is also really funny, because you are expecting a traditional character type, and yet you get a fly. You can also really relate to the feeling the fly must be feeling- so free and exhilarated!
All that being said, it is fairly simple and reliant on a "punch line joke", so I question how it would work in a contest setting. The first idea with the sword might have more of an overall visual impact, and be a stronger contender against other pieces.