Can I distribute damage any way I want with Elder Dragon in base and kill 2 units with 1 damage each?

Yes, you can. With Elder Dragon in play, its passive ability ("Any amount of your damage is enough to kill enemy units") modifies the definition of lethal damage for damage you are responsible for.

Here is how this works:

• Lethal Damage Modification: Normally, lethal damage must equal or exceed a unit's Might (Rule 460.2.c.2). Elder Dragon changes this to "any non-zero amount."
• Combat Assignment: According to Rule 460.2.c.3, you must assign "lethal damage" to a unit before moving on to the next one. Since Elder Dragon makes 1 damage "lethal," assigning just 1 damage to a unit satisfies this requirement.
• Distributing Damage: Because you only need to assign 1 damage to kill a unit, you can assign 1 damage to the first unit (killing it), and then proceed to assign 1 damage to the second unit (killing it), provided your total combat Might is at least 2.

This interaction is confirmed by RiftJudge FAQ #8762 and FAQ #10071, which explicitly state that with Elder Dragon in play, you can distribute 1 damage each to multiple units to clear them from the board.