Alright, how about this as a source of the mermaid legend?

[Ivan Seeking]

Alright, how about this as a source of the mermaid legend?
http://en.wikipedia.org/wiki/Sirenomelia

Looks like a mermaid to me!

What brought this story to my attention was a news report [CNN] about the girl in the picture, Milagros Cerron. She had corrective surgery six months ago and started ballet lessons today.
http://www.livinginperu.com/news-3665-health-perus-little-mermaid-baby-doing-well

 

[SGT]

The most accepted origin of the mith of mermaids is the dugong. The female has two tits located in the same position of a woman breasts and sometimes takes the calf between the fore fins to feed it.

 

[radou]

The female has two tits located in the same position of a woman breasts

Can they grow huge?

 

[SGT]

Can they grow huge?

No

Because both mother and calf need to come up for air regularly, the mother occasionally rears out of the water, holding the still-suckling calf with her flipper so it can breathe. It is easy to imagine that such a tender scene may have contributed to the mermaid myth.

http://www.abc.net.au/science/scribblygum/august2004/default.htm

 

[kleinjahr]

"may have contributed to the mermaid myth"
Throw in old time sailor's isolation from women and prodigious consumption of grog.