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M4E in Mystaraby Ashtagon
In terms of retrofitting that party into Mystara, there are a couple of options. The biggest issue is that Mystara doesn't canonically have anything resembling dragonborn or tieflings.
The Portal: The party finds a one-way portal that leads into Mystara. No need to explain their races, except to note they will be one of a kind. Note that the 4e tiefling artwork is a fairly close match for Mystara's diaboli race (a race which basically only exists off-camera as a kind of bogeyman), so he may be in for a rough time.
Native Explanations: Eladrin are most usually explained as a sub-race of elves, who intermingle and breed freely between the two. The only suggestion for a dragonborn origin I have seen so far is from the Wyrmsteeth mountains in Norwold, although the jungle coastline of Davania (just south of the Isle of Dread, where Thyatis has a colony), cold be another alternate origin area. For tieflings, some have suggested removing the physical description fluff (making them appear basically human), and using the crunch (rules and stats) to describe native-born members of the Alphatian nation. used in full 4e artwork style, the only suggestion I've seen so far is to use them as diaboli colonists.
If they want to try something new, Mystara has rakasta and lupins (cat-folk and dog-folk) as its own unique take on race options. I haven't seen any suitable material for making rakasta. I suspect the rules for making gnoll characters (I saw a playtest somewhere once) could be re-fluffed if you want a viable lupin PC. Neither rakasta nor lupin (nor tortles) are common in the core area of Mystara, although the more cosmopolitan members of society shouldn't be too shocked by them.
D&D 4E Tortles
Tortle – 4E Conversion
Lupins 4E conversion