the events resolve like this in that situation:
1- Fighter's interrupt goes first
2- The dragon's tail swipe next
3- Reaction powers
Interrupts do exactly that Interrupt any and all actions that are taking place, if an interrupt interrupts another one the most rescent one goes first. Reactions only happen AFTER any action that triggered them. Also if an interrupt actually kills something in the middle of the action that action is ended, since the thing taking said action is now dead. And in regard to the never ending loop of actions, you can only take ONE Immediate action on a turn or when it is not your turn.