They said the Giant Squid couldn't exist and yet they found it ;P But as for the Kraken I'm not to sure of. BUT it could have been possible that they exaggerated in the stories of what this creature was exactly.
actually the colossal squid is larger than the giant squid, sorry I'm quite a nerd and I watched a documentary on the colossal squid :P
as for the mythology surrounding the Kraken, a large hurrican could have hit city that was supposidly destroyed by the Kraken (sry i forget the name of the city)and it was destroyed that way while a large squid could have been spoted during the event and the whole event then blamed as punishment from the Gods... Just my theory on what could have really happened.
I never knew of the Colossal Squid haha. But yes I agree with Ali. Most olden stories, such as the one being spoken, have been slightly exaggerated (or even more so) more and more every few generations. I mean look at Jesus! People said that he "walked on water" but really? They also said that it was stormy and he was at a distance ;P Like I said, any story of history could be exaggerated haha
for all of you clash of the titans buffs, the original myth of persus had a sea monster named Cetus as the actual princess devourer.
Persus happened upon andromeda when he was returning from slaying medusa, a task he was given in order to obtain the freedom of his mother from a cruel king. Poseidon was said to have sent the Cetus to kill andromeda because her mother casseopia claimed her beauty was above that of the gods.
Dispite my enjoyment of the movie, that was artistic lisence. The Kraken was also a scandanavian/norse belief, the greeks had actually very little to do with the open ocean beyond the agean sea, they belived that the realm of the dead was reachable beyond the rock of gibralter (aka the pillars of heracles to them). On strictly movie terms, I wish the Kraken had more screen time lol.