I'd often wondered about this motif in connection with the white and red dragons of Dinas Emrys.
As I discuss in some depth in my book THE MYSTERIES OF AVALON, the original 'dragons' of this fort in Eryri were the cremated remains of war-chieftains, wrapped in cloth and inserted into funeral urns. But folklore processes went to work on these simple burials and transformed the dragons into the genii of the British and English peoples. Yet more mythological accretion altered the dragon story again, converting these monsters into lunar eclipse phenomenon (white moon vs. red moon). The red dragon was probably applied to the British because their nation had been "eclipsed" by the white English serpent. Snakes, because of their ability to shed their skin and become bright and shiny again, were anciently paired with the moon, which goes from old to new and can take on a crescent or serpentine shape. There may be further tie-in with the Roman insignia of the garrison at Segontium, which resembles two crossed serpents. These serpents, in turn, might be a symbolic representation of the twin snakes of the Herakles myth.
Recently, I happened to think about the serpents again in the context of real animals found in northwest Wales. As these funeral urns were said to be found below the fort's pool, my first thought was that the pool itself had been confused with Llyn Dinas below the fort. If so, one of the prototypical animals that might have become confused with the dragon-chieftains were eels. However, after checking with good Websites and with Welsh ichthyologists and fishery biologists, it became evident that the required white and red colors were wanting in this fish species.
Fortunately, there was an excellent candidate for the vermes/dragons: the Common European Viper. This animal, found in Gwynedd, exhibits a marked degree of sexual dimorphism. The male can have a white color, while the females can be red.
These snakes gather together during the winter in hibernacula - underground, frost-free locations. Their emergence from such communal dens would certainly appear to the casual observer as if they were issuing forth from the underworld! In addition, the males engage in combats known as the 'Dance of the Adders.' This pre-mating behavior sounds much like the combat of the red and white serpents of Dinas Emrys (with the reproductive coupling of males and females being confused with the earlier competitive efforts of the males).
The resemblance of the red and white dragons to the red and white vipers seems to me to be a rather amazing correlation. At the very least it may prove to us once again that our keen observation of Nature has a profound effect on the development of folklore tales.
Male and Female Common European Vipers