In the past, if I had an egg waiting ti hatch, it counted for the quest. I have an island egg waiting to be hatched and plan on placing it when I get to the part of the quest that asks for an island dragon. Right now I had to breed a fire dragon with another dragon. I could not plan in advance for the island because I only have one breeder. Will comment when I get to the part of the quest that asks for an island dragon.