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Legendary idea; Tiddalik
Basically it's a giant frog from the Dreamtime that swallowed all of the world's freshwater. When everything started to dehydrate, they decided to try make Tiddalik laugh so he'd open his mouth and release all the water. After many failed attempts, an eel finally managed to make him laugh and released all the water. Unfortunately it caused a flood and heaps of people drowned.
Evil Team may want it to extort money from people in exchange for water. Kind of a rip off of Aqua and Magma, but whatever.
Another idea would be to incorporate it as a 580 or 600 BST legend in conjunction with the Dream Whale idea from earlier in the thread, and the Evil Team use this one to take enough water to sustain the Dream Whale while it's in their possession or lure the Dream Whale out or something.
Ground/Water is the typing I was thinking of. Any ideas of how you could make it more Pokemon-y? So it isn't just a big frog?