I had a thought regarding this. This "false trail" - from what we the readers know, the "false trail" seems to mean "They think I'm around the Purelake, but I'm really at the Shattered Plains." (This, of course, requires that the letter is written some time around the events of WoK, and not much, much earlier.) What if the "false trail" referred to, when the letter was written, means "They think I'm on Nalthis, but I'm really on Roshar", and that Hoid doesn't know that Galladon and the others have successfully trailed him to Roshar?
No way to prove it either way, I know, but just something interesting that popped into my head. Hoid seems crafty, though, and has much more experience than Galladon, so I'd actually be a little surprised if Galladon and the others managed to get one up on Hoid without the latter knowing.
Another thought that popped into my head. Brandon knows what we're like. He knows we'll do this very thing - try to analyze every single word that he wrote in an attempt to figure things out before it's all spelled out for us.
It wouldn't surprise me if he put a line like this in there, intending its use to be literal, while we initially gloss over it as a simple insult. Hiding something in plain sight, as it were. "Hee hee, I'm actually telling them outright that the recipient is a reptile, but they're going to think the writer is just insulting the recipient. /cackle"
So yeah, I too am leaning towards the dragon idea.