Answer:
Find the hidden map for Pagoda of the Shadows (just keep digging on lots until you find it), go to the hidden lot by either calling a taxi or by walking and befriend the yogi, you have to know the bow gesture to interact with him.
Then serve him tea and talk to him, offer him a gift and he will tell you the Dragon Legend and give you a scroll to keep so your Sim can tell other Sims the legend.