First off has there been any official ruling/faq/errata on how this works?
Secondly if there isn't anything official what makes the most sense
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If I have a dragon flying around, and it makes a blast 5 breath, is it a 5x5x5 cube? or is it some random panel in space that confines itself to 5ft squares?
I ruled that logically, like a cone it would extend up, if it starts on the ground it could be aimed up to cover a 5x5x5 area, but usually it was started on the ground, so it would only fill 2.5 (rounded down as like everything else 4e) so the breath would only fill 2 squares vertically.
So if the dragon is in the air, and shoots down, it would still be a 5x5x5 "cone"