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I do believe that reach is an element of melee attacks, not ranged attacks. If that is the case, then the breath weapon would be measured from the dragon's space rather than from the extent of its reach. Unfortunately, I don't have easy access to the rules so I can't give you much more than this gut reaction.

Sean K Reynolds Designer, RPG Superstar Judge |

The rules say a cone or line starts from any corner of your square; it doesn't make exceptions for reach. (Note that a non-dragon creature with 5 ft. reach doesn't get to use that extra reach, its cone or line starts at a corner of its square, so dragons with exceptional reach don't get to start that farther out.)

Kazaan |
Breath Weapon (Su) Using a breath weapon is a standard action. A dragon can use its breath weapon once every 1d4 rounds, even if it possesses more than one breath weapon. A breath weapon always starts at an intersection adjacent to the dragon and extends in a direction of the dragon's choice. Breath weapons come in two shapes, lines and cones, whose areas vary with the dragon's size. If a breath weapon deals damage, those caught in the area can attempt Reflex saves to take half damage. The save DC against a breath weapon is 10 + 1/2 dragon's HD + dragon's Con modifier. Saves against various breath weapons use the same DC; the type of saving throw is noted in the variety descriptions. A dragon can use its breath weapon when it is grappling or being grappled.
The rules for dragon breath already take this into account. You start measuring from an adjacent intersection, not one or two squares away. The dragon isn't going to extend his neck out as far as it can go while delivering the breath weapon... he's going to brace himself and keep his neck as short as he can for better control and less power loss. If there were a way for him to breathe "ballistic shots" rather than a spreading breath weapon, I'd say that would involve stretching the neck out so that it's more like a bio-magical howitzer firing a "shot" of breath that will land in a much farther place and do a spherical burst on target rather than a cone or line-shaped burst from the creature. That would likely also provoke an AoO since it's thrusting its neck out to make the shot. That would take some houseruling, however, and you'd probably figure the range with the neck length in mind anyway.