There she is! Note the not-at-all out-of-place lush greenery on Lake Elsinore's shore in the background.
Yes, there really is a myth about one. (By the way, read through some of that Weird California website and very quickly you notice the patterns in all these stories. Do note that Weird California also contains an entry for the Creation Museum in Santee.) What's hilarious about the Lake Elsinore lake monster is that the lake dried up completely in 1954, and guess what? No monster! So of course the answer was "Oh the monster went up into a cave on the side of the mountains that year and waited out the drought." Uh huh.
This is amazingly similar to Carl Sagan's parable of the dragon in the garage, expanded on further by the Less Wrong community.
The question is, has anyone been harmed by this particular superstition? No one seems dead-set on forcing others to believe in the Lake Elsinore Monster, and punishing those who don't, and using your tax money to teach children about it in public schools. Maybe indirectly it does, because someone's general critical thinking ability might drop a point once they accept something like this. That said, I've never met anyone who professes belief in the Lake Monster, I just thought it was funny. Especially the lake drying up part. (Outraged Lake Monster fundamentalists: please comment. Please.)
A final comment about these ghost and monster stories, and Weird CA specifically: boy there are a lot of ghost stories on there. But always about people. Why no ghost mice? Or ghost trilobites? Ghost E. coli? I have the same question about our ubiquitous ghost ships. Do all forms of transport have the potential to enter the spirit world? Hey, I just saw a ghost Chevy the other day! And on quiet nights you can hear ghost roller skates...it's funny, but someone who says they believe this stuff and doesn't ask these questions, doesn't believe this stuff.