New England Folklore shares this Penobscot legend:
It seems like Bigfoot is the monster most frequently sighted out in the woods these days. He’s been seen in every New England state, even Rhode Island. However, in the past a much greater variety of strange creatures could be seen lurking around New England, and many of them are documented in the region’s Native American lore.
One of the more interesting creatures was the water dwarf of Penobscot legend. I write in the past tense, implying that the water dwarfs are gone, but that may not be the case. Maybe they are just lying low and keeping out of sight. That might be OK, because seeing a water dwarf often brought trouble.
The Penobscot name for the dwarfs was alambegwinosis, which literally translates to “underwater dwarf man.” (That would be an awesome name for a superhero!) Sometimes singly and sometimes in villages, these creatures dwell in deep pools in rivers, or at the bottom of lakes. An alambegwinosis is quite distinctive looking. If you encounter a three-foot tall naked man with long straight hair down to his waist near an isolated deep body of fresh water you’ve probably stumbled on a water dwarf.