THE JOURNAL ANTIQUITY has a brief paper by Richard K. Jeck in its current issue (78/300, June 2004) that offers an explanation for the origin of the legends of the Great Flood: "The great flood legends - ancient misreadings of the fossil record?" Excerpt:

The world-wide occurrence of marine fossils in high elevations can explain why stories of a great flood are found in the folklore or legends of ancient peoples in diverse places around the globe (Bright 1961; Wickersham 2000: 66-69). It is understandable that primitive peoples had no other conclusion to draw than that a deep flood, one like no other in their experience, must have put those seashells way up there. They did not know about mountain building and the geological processes that can raise fossil-bearing, sedimentary rock strata to great heights. In their minds, the mountains and hills had always been there, just as they saw them, from the beginning of time. The mountains never changed over their lifetime or even over generations. They had no way of knowing about the slow geological processes that we know about today.

The occurrence of marine fossils in high elevations also explains the ancient conclusion that a flood that deep must have covered the whole earth. To the ancients, a global flood also seemed to nicely explain why seashells were found on the hills and mountains in distant countries as well.