There is a book you might be interested in called
The First Fossil Hunters, by Adrienne Mayor that deals with greeks and their contemporaries finding massive fossils and their relationship to the greek myths of griffins, cyclops and giants.
After reading the book I was struck by the possibilities for dragons from plesiosaurs with fins for wings. Especially if fossil found way inland.
{added by edit}: It is ludicrous imho to think that the ancients were unaware of the fossils of giant creatures when they were lying out on the ground for the first scientific(ish -- those were early days of paleontology) expeditions to find.
[This message has been edited by AbbyLeever, 04-06-2004]
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