There are many legendary creatures you could work on, with dragons being one of the most exciting possibilities. You can zoom in on dragons within a culture (Greek dragons, Japanese dragons, etc.), or you can find a way to combine dragons from different cultures in your project.
Research Tip: Wikipedia is a great place to start your research; there is a big article about Dragons, and there is also a List of Dragons in Myth and Folklore which will lead you to all kinds of dragon articles. You might enjoy this book: Dragons and Dragon Lore by Ernest Ingersoll and you can search the Freebookapalooza for dragons (use Control-F to find the word "dragon" in the story titles).