I really think the Riders would make a great minor civ - or some such thing. Have them act as a minor civ, with one city, and they have diplomatic influence through some U.N-like thing. They could have the ability to grant other civilizations Rider units if they show good diplomatic sovereignty - thus providing an incentive not to be a warmonger. You have to choose - if you want to be Galbatorian and try to conquer the world, then the Rider civ won't trust you and you won't get Riders. But, if you keep a friendly, open-trade nation, then you'll get more than the former - then you can go for the world-conquering. It should be a healthy balance.
For that matter, Rider units should have a spawn rate like:
Diplomatic approval rate + Rider approval rate + Wonder rates
Then, there's extras. Eggs.
Extras would be like, well, treasure. Hearkening back to Vikings! scenario in Warlords, treasures (eggs) could appear and the whole world would be notified, and it'd give a vague description of where the egg is (far north of Ellesmera the city, say) and everyone would rush to find it, return it to, say, their capitol, and then they'd get a rider-gaining margin - a message saying "You will have a rider in 50 turns at most."
Riders should be unpredictable, and the player should have very little dictation over how they are gained, unless of course they overthrow the riders - throwing everything into chaos.
Just throwing around ideas.
As for your dragon civ input, I like the peak idea! Dragons could have access to peaks, thus enabling them to go in so many more places. But I think the peak settlements should require have access to regular hills/land (maybe even coast), so that other civs can reach them - maybe. Dragons should be elusive, but not untouchable.