Mythical Beasts

We have all read a story or two were the hero either fought or was helped by mythical creatures. Many of these creatures are very similar to normal animals. The Pegasus, a winged horse, seems to have possibly existed along with the unicorn, dragon, and especially the Giant Sea Serpents. These creatures could have existed in some form or fashion but I doubt that they would have existed as we see them today. Were mythical beasts real at some point or does man have an extremely good imagination?