I personally find A1 really attractive however I don't think there's a definite answer to the above/would really welcome a FAQ entry on this but..... like talismanamsilat reminded me, (from the Dragon Rulebook):
If a character misses his turn, he does not draw a dragon token on the turn that he loses.
For reasons of consistency (the reason why I really don't like the C-interpretation) I'd say (B) is the correct one.
Any toughs on this breakdown/final answer?