I did some lore hunting and came across The Story of Lyrisius, a book from Daggerfall. The last line would seem to imply this so-called wyrm was four-legged:
The dragon nurses a grudge against Lyrisius and all of his kind. It has vowed never again to trust two legged bearers of weapons.
The scholar's note is also important to take into consideration:
Scholar's Note: If this legend has a basis in fact, the artifact Fearstruck was utterly destroyed. No other reference to it has ever been found.
Since it is a legend, it's debatable whether the exact details of the story should be taken as fact. This is true for quite a bit of Elder Scrolls lore anyhow.
The book appears in Daggerfall and no other games, so if dragons were at all four-legged, that has been retconned. Every visual depiction since Redguard has shown dragons as two-legged, so it is what it is. I suppose it's up to opinion whether you think Bethesda ought to have made the dragons two or four-legged.
Another famous retcon example is Cyrodiil. From Arena to Morrowind, Cyrodiil was described as a jungle province. Lo and behold, it was quite different when it made its debut in Oblivion. This is now famously chalked up to a "transcription error". Much the same, now that Bethesda has quite firmly established the appearance of its dragons, the wyrm's description in "The Story of Lyrisius" should be taken as legend rather than fact.