Ao-ao

The Indigenous Guaraní tribe of Paraguay and northern Argentina, who inhabit the extremely remote and sparsely populated Chaco savannahs, believe in a creature known as the ao-ao, one of the cursed sons of the god's Tau and Kerana. 

They’re described as resembling an enormous long-haired sheep, sloth, or peccary with formidable claws which they use to attack anyone that gets too close. The ao-ao’s name is onomatopoeic for the creature’s vocalizations. Although the ao-ao’s origin is mythological, it is usually treated as a real animal by the people in the area. Few actual sightings are recorded in detail but are overwhelmingly believed to exist by locals.

In British author Ben Macintyre’s 1992 book Forgotten Fatherland, he claimed that a villager on the Paraguay/Brazil border, a Guarani hunter was killed by an ao-ao. Some theorize the ao-ao are a folk memory of ground sloths, likely megalonyx, as the ao-ao is said to be only about the size of a sheep, unlike the elephant-sized megatherium.