Dragons presumably were crockadiles, and the "fire" was swamp gas...last week NationalGeo Asia channel presented a story on the universality of the dragon myth, alas I can't find a link except the program descriptions:
Last of the Dragons
What's the truth behind the dragon myths of the East and West? A captivating look at the origins of Monitors, Lizards, Crocodiles and Snakes: They are descendents of animals that survived the Jurassic period and have unique survival skills, which surpassed those of the Dinosaurs. Exciting sequences show the brutal habits and fearsome hunting techniques. Computer Graphics and action footage bring out the similarities between ancient dragon myths and modern animal reality.
And the WSJ has this article about finding legendary animals LINK
The greatest monsters in western Literature list can be found HERE
Probably Grendel was a bear (Grizzleys reach ten feet tall, after all) and Beowulf probably means Bear-wulf, i.e. skin changer, a man who is a bear.
Attacks of the innocent by monsters is an ongoing theme in ancient literature, and attacks on isolated villages by outlaws, and the people's rescue by great warriors, is a story that goes from Beowulf to St.George to the Seven samurai...