Valkyries are essentially slightly lesser Vans that fly. Use them to get the tactical flexibility flying offers. If you can't think of a use for that flexibility, recruit Vans instead.
Fire is still useful even if your Dragon has retired to the lab. He can at the very least forge fire items, and other nations are going to be employing fire on the battlefield - meaning that things like Red Dragon Scale might be appealing... He's also going to be able to find Fire sites, and you can always alchemize
Every strategy gives up something, and the one I presented is only one among many. In this case you give up some magical flexibility in order to get a very good bless for the best blessable troops in the game, and a pretender who is capable of going out conquering on turn 2.
Blessing outside the prophet's army does take a bit of managing, but isn't that hard.
If you're worried about the nature and death summons, there are a few answers. First off, as Tom pointed out, Druids and Jade Amazons aren't terribly uncommon. Second, you're in a very good position for trade, in order to get boosters you can't make yourself. Dwarven Hammers are one of the best trade baits in the game. Thirdly, in a game with 65% sites, and with a nation that could be taking two provinces a turn from turn 3 on, empowerment is certainly not out of the question.
I find that Death scales do hurt, and I avoid them. On the other hand, Arch always takes them, and he wins all the games I'm in with him
If I'm using Valks instead of Vans, I tend to give them hold and attack orders. They are expensive enough that you won't have many, and not quite tough enough to take on a whole indy province or enemy army themselves. Allow a little time for the engagement to develop, then send in the flying cavalry to deliver the coup de gras.