Now my Dragon can't fly left or right while i am flying forward. Only when standing still! My game is unplayable now!

Either use the mouse or revert back to the previous version.

It was one of the many problems the game had in the original that GOG fixed. Last I checked, the turning was still working fine. Will try the update later to see if that is indeed the cause.

EDIT:
Can confirm!

Whatever the update preceding the Deluxe Edition release contained reintroduced the bug. So do NOT update to the version released 6 days ago. Who knows what other issues got reintroduced.

The game received another update. Maybe someone would like to confirm if the issue has been fixed?

The issue has been fixed.

Fixed! Thanks!