Much like a pearl forms around a grain of sand, every myth has a seed of truth in it, somewhere.
> ... every myth has a seed of truth in it ...
The more likely explanation is that fossils have always
been around, but there have only recently (last ~150 yrs)
been satisfactory theories of what creatures they were
from and when those creatures existed.
Pre-19th century humans were used to finding bones of
recently living animals, and might suppose that any
such fossils were of animals still wandering about.
Imagine an 11th century dude finding a skull like this,
showing it to the rest of the clan, and then having the
tribal wizard "explain" what monster it came from, and
what the clan needed to do to avoid such monsters (and
whatever it was, it worked :-)
I think it only makes sense: a few bones were going to be found: and the "classic" T-rex and others absolutely look like the drragons of myth.
When the dinosaurs died, then flexed into twisted shapes as the muscles dried, the result is a "dragon-like" flying shape as well. (Or worm-like Chinese dragon...)