This part can be tricky.
Along with looking at the German book in the bookstore to ascertain 3 dragons, have you also looked at the German/English dictionary to ascertain 3 o'clock? And after that, go to the attic, open the trunk, take the key, and then set the clock?
There's also a video walkthrough
here for the trunk/clock sequence (it starts at about 3 minutes 55 seconds).