Silverdragon is not performing a sound and alert for Vyragosa. It is sharing the "seen" info between party members however and recording any seen vyragosas. The "test" button does not work for vyragosa either.

If it's seeing and recording Vyragosa but not saying anything about it, this almost certainly means that you've already got the achievement-completion for Vyragosa and "already found" is unchecked in the settings:

Try checking that box, then using the "test" button.

I feel dumb (along with the 8 other people I've camped with the past 2 days). I even looked through the settings. I guess I missed this one. Thanks for clarifying!

No worries -- it's the one default which is unhelpful for the very-specific "I am camping the Time Lost Proto Drake" situation. Blizzard has stayed away from the rare-spawn-of-a-rare-spawn model since then.