Is There A Horror Story About Dragons?

[Vinyadan]

And of course, dragons can be associated with the abject. Dragons are often not majestic and firey in the old legends. They are poisonous. Creepy, slimey burrowing things that poison the land. Greedy and pitiful. Or even older, they are the watery chaos serpents, opposing civilization.

In Greek stories (dragon comes from Gr. drakon = "thing that stares" i.e. snake) the mythical snakes are first and foremost protectors. So there is a snake protecting the Garden of the Hesperides and its golden fruits, and foundational figures/ancient kings in Thebes and Athens are partly snakes, born from snakes, or become snakes.
Cadmus for example defeats a snake to take possession of the land where he founds Thebes, then sows the dragon's teeth, from which a number of warriors are born, five of which will help him with the city (the rest kill each other). Cadmus then becomes a dragon in his old age.

A snake protects the Golden Fleece. Jason has to let himself be devoured and regurgitated by it. Unfortunately, we only have images, and no explanations. It does sound pretty horrifying, though. In other versions, it has to be put to sleep by magical means, or is killed by Medea. Its teeth also grow soldiers that kill each other thanks to a trick.

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Snakes also protected sacred trees, chasing away would-be violators, a feat that was occasionally still reported in historical times.

They are generally seen as chthonian creatures, connected to the earth; in ancient mentality, the underground was filled with secret treasures, and dragons/snakes had a role protecting them.

The evil snakes and evil creatures that were partially snakes were often associated with Gea, but their genealogies change based on author, and I suspect these evil snake creatures (Typhon, Medusa, maybe Delphyne...) might have more to do with those chaos dragons you mentioned than with the chthonian guardians.

Also, thinking about it, I don't think I remember any snake-like creature residing in the land of the dead (Dante corrected that, a lot).

[Dire_Flumph]

Dragonslayer is probably closest.

Honorable mention though to Outlander (not that one), about a dragon terrorizing a Viking village shot more as horror than action. Except the "dragon" is a large alien beast that escaped a crashed spaceship, but close enough.

[Vinyadan]

Dragonslayer is probably closest.

Honorable mention though to Outlander (not that one), about a dragon terrorizing a Viking village shot more as horror than action. Except the "dragon" is a large alien beast that escaped a crashed spaceship, but close enough.

The Xenomorph in Alien 3 is also occasionally referred to as a dragon by a shocked inmate.

[Metastachydium]

Also, thinking about it, I don't think I remember any snake-like creature residing in the land of the dead

There are such creatures, actually. The Erinyes were commonly described and depicted as having snakes for hair and carrying serpents; Kerberos, the par excellence chtonic guardian likewise had the Chimaera's serpentine tail(s), sometimes with more snakes, attached to various parts of its body added for good measure. The Aeneid, furthermore, places a hydra with fifty heads at the gate of Tartarus. And these are just the more prominent ones; I'm confident there is more to add.