Midway has released the offical
Mortal Kombat: Armageddon bio for Onaga, the Dragon King. The bio explains in great detail what happened to Onaga after the events of MK: Deception leading up to Armageddon. Apparently, Shujinko and Nightwolf's Deception endings are in fact canon with Shujinko defeating Onaga and Nightwolf trapping him in the Netherrealm.
The second half of the bio reveals that Onaga has made a deal with Shinnok. Onaga must serve Shinnok in exchange for becoming ruler of Outworld, once again. However, Onaga does not trust the fallen elder God, and feigns his allegiance, secretly planning to defeat Blaze himself.

Click
here to view the bio at the official MKA website.
Thanks to forum member
anemis for the news update.