
Unearthly Serpent |

Breath is supernatural. It doesn't require contact to function, like claw attacks or thrown quills; rather, it produces flame (or bolts, or whatever).
And even if it was extraordinary, I can easily see it still being usable as a physical manifestation of the ghost's past self. Quite the same as voice. Voice is made of sound waves produced by air passing through a physical canal, and a ghost can do it despite being unable to manipulate air and not possessing that canal. It's sort of a projection of his psyche in physical form. Same for the breath.

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RAW: Yes.
Reason: A breath weapon does not require physical contact to be used.
This was also addressed by James Jacobs back in 2010, and I agree with him.
http://paizo.com/threads/rzs2lhcn?Ethereal-and-Dragon-Breath
Nov 11, 2010, 04:09 PM
James Jacobs
A ghost dragon's breath weapon should affect creatures normally. That's pretty awesome, also, so that's another plus in that category.
Since ghosts retain things like supernatural abilities and spellcasting, this DOES mean that ghosts made out of things with those abilities are naturally more powerful and more versatile than ghosts made from things like fighters or animals (or other monsters that have no actual magical powers). That's fine. It's perfectly okay for some monsters to be better suited to take advantage of any one template than other monsters.

Amakawa Yuuto |
I get the example made by Davor here, i feel i should just be padantic and point out that a Gould cannot have a ghost as it is undead thus has no soul. but name a creature with an on hit effect from a physical attack like snake venom and he would be correct
To be pedantic right back at you, the spell "Magic Jar" states that intelligent undead (which includes Ghouls) do have souls.
(However, more than a few things hint that an undead's soul and body don't have to be from the same person)I agree on the "Dragon Breath stays functional", though.