I think it would be possible. For example, if the dragon egg contained a conjoined fetus, it could be possible for it not being able to survive long enough for hatching. There have been cases of conjoined reptiles before, so this would be believable.
As for the hatching bit, I'm not sure. If the fetus is dead, then it won't be growing anymore or making any movements. So I think it would be unlikely for it to hatch if it's already dead by that point.
One suggestion I could give is maybe it only dies during hatching. Maybe it's using the last of its strength to break free, but at the final moment, it just gives out and dies. Another is that maybe the mother helps the baby hatch, not knowing it's dead until after she gets it out.