I know you think “the stone beast breathing shadow fire” refers to a literal stone dragon however, I think that is a mistake. While I do believe Melisandre will summon a kind of pseudo-dragon with blood magic, I don’t think the prophecy refers to that. I think the stone dragon in the vision refers to Jon.
Here’s my argument:
First, a dragon in a prophecy usually refers to a Targaryen as shown in Dunk and Egg.
Second, the stone dragon prophecy comes in a group of three trio prophecies: daughter of death, bride of fire and slayer of lies :
Viserys screamed as the molten gold ran down his cheeks and filled his mouth. A tall lord with copper skin and silver-gold hair stood beneath the banner of a fiery stallion, a burning city behind him. Rubies flew like drops of blood from the chest of a dying prince, and he sank to his knees in the water and with his last breath murmured a woman’s name… . mother of dragons, daughter of death …
Glowing like sunset, a red sword was raised in the hand of a blue-eyed king who cast no shadow. A cloth dragon swayed on poles amidst a cheering crowd. From a smoking tower, a great stone beast took wing, breathing shadow fire… . mother of dragons, slayer of lies …
Her silver was trotting through the grass, to a darkling stream beneath a sea of stars. A corpse stood at the prow of a ship, eyes bright in his dead face, grey lips smiling sadly. A blue flower grew from a chink in a wall of ice, and filled the air with sweetness… . mother of dragons, bride of fire
Look at the first and third prophecy trios, and you will find each vision/prophecy deals with a single person. The first one deals with Viserys, Rhaego and Rhaegar. The third deals with Drogo, the second one I’m unsure about, maybe Tyrion, and the third deals with Jon. No person is mentioned twice in each trio. Therefore, in “slayer of lies” it would be redundant to mention Stannis again, and out of sync with the scheme being used. Is he that dangerous or formidable Dany needs to be informed twice about him?
Third, look at the first and third trios again, and look at the last lines of each:
Rubies flew like drops of blood from the chest of a dying prince, and he sank to his knees in the water and with his last breath murmured a woman’s name
A blue flower grew from a chink in a wall of ice, and filled the air with sweetness.
The former is Rhaegar whispering Lyanna’s name, and the latter is Jon on the Wall with the blue rose referencing his parents’ relationship. Thus, it can determined that the last vision of each trio relates to Jon somehow.
Fourth, in the trio of “slayer of lies,” each lie is tied to a claim for the Iron Throne, and have a significant political impact. Aegon being Rhaegar’s son ties to to his claim, and it destroys the cause for his large following. Stannis’s status as Azor Ahai ties to his claim to the Iron Throne, and the Queensmen are fervently devoted to Stannis out of the belief he is Azor Ahai. I think he will emphasize that sometime after he learns of Aegon and Daenerys, possibly with the will of the gods or rather god, superseding the laws of man, including the law of inheritance. The third vision of the stone dragon has to tie to someone’s claim to the Iron Throne, and it also must be a king, or someone of royal lineage. Stannis has already been mentioned so it can’t be him. In the case of a literal stone dragon, where is the lie in that? If you that it is the lie of it not being a real dragon, I think that would already be obvious, and wouldn’t need pointing out. The lie being revealed has to have a significant political impact when it is unveiled, something a stone dragon can’t live up to.
Fifth, if we look at the stone dragon, as I already mentioned a dragon refers to a Targaryen in prophecy. If we look at “stone,” Rickon hides on Skagos which means “stone” in the Old Tongue, Sansa hides at the Eyrie under the alias “Alayne Stone,” and Arya hides Needle under a stone in the stairs. “Stone” is connected with hiding things, especially people and identity in the Starks’ case. Thus, it can be assumed that stone dragon = hidden Targaryen.
On top of that, I think the stone dragon regarding the prophecy Melisandre talks about relates to the stone dragon in the HotU vision. The prophecy for Azor Ahai Reborn talks about waking a dragon from stone according to Melisandre, and it seems waking a dragon from stone refers to Jon discovering his Targaryen identity akin to Daemon II’s prophecy of a dragon hatching at Whitewalls referring to Egg’s growth after his Targaryen identity is found out.
In conclusion, I think the last lie Dany must slay is the lie of Jon being Ned’s bastard. There doesn’t need to be any explanation as to how it relates to Jon’s claim to the Iron Throne. The reveal of Jon’s heritage would have a much more significant political impact than something regarding a stone dragon brought to life by Melisandre.
Here’s my counter argument:
1. Melisandre says that she’s going to wake a stone dragon.
2. WOIAF repeatedly mentions that there’s a dragon and/or egg underneath Winterfell ready to be awoken.
3. These prophecies are rather straightforward, without much complex or hidden wordplay. Why does GRRM break the pattern here and nowhere else?
4. I really don’t buy the argument that stone means hidden, especially not with that kind of circumstantial cherry-picking. I could equally say that Stone refers to the castle in the Eyrie and Mya Stone, therefore the prophecy is actually that Mya Stone is a secret Targaryen.