Not far from where I live there's a ruined church standing on a cliff edge. Actually, there's only one wall left standing - the other three were taken by the sea. The church was built in the 15th century; legend has it that after it was built, fishermen from that village caught a mermaid in their nets; they wanted to release her, but the village priest insisted that she be baptised. So she was put in a wash tub filled with holy water and locked over night in the church. In the morning, they found her dead. To avenge her death, her father, the king of the Baltic Sea, destroyed the church.
Haha, no, it's an actual legend (and not the only one pertaining to the ruins). BTW, here's a nice shot of the place: [link] . I live 15 kms from there. And as for lore, there also was a sunken city and a legendary Viking stronghold in the region .
WOW! Sounds like you live in a place with lots of mystery and intrigue to draw from. I'm kind of envious. Where I live, the only real mystery I ever encountered was whether or not there was a skunk ape in the area. [link]