I just came across the old folk tale of the city of Saeftinghe, which stood in a part of the Netherlands that is now submerged in a brackish swamp. An ancient city, lost to flooding, seems like there are many such legends. A few things make it stand out for me. First, it's a real historic event: the Dutch had drained the land in the 1200s. The city itself actually survived the flood that destroyed most of the surrounding land in 1570, but then Dutch soldiers (for reasons never fully explained in the several articles I read) had to destroy the last dike in the midst of the 80-Year War. The city was lost and never restored.
The other is just the little details of the folk tale version that make it charm me. It's a wealthy city, but cruel to those who come to immigrate, and this cruelty and greed is explicitly listed as the reason for its punishment. The mermaid part is fun, though I think common to other folk tales. But the ocean fish found swimming in the well is a cool touch, one of those things you could play up in a horror story, with the slow-building awareness of what's in story. And the bell tolling in the fog, though again common to other folk tales, wraps the tale up with a pleasing fairy tale feel.
I have to admit I'm tempted to somehow make use of this tale in a short story someday.