I don't know much about the Gryphon. With the types of creatures that are found in the deep sea, it's plausible that such weird creatures existed on land as well. If not Earth, in our planetary system at least, we know little to nothing about Mars and Phaeton.
Dragons or Dragon like creatures did exist, the "Dinosaur fossils" are a proof for the existence of 'weird' creatures. If a bat, which looks like a rat with wings, can exist, then why not a Dragon or a Gryphon? And I am not sure or aware if the Gryphon has been used by the Gods or by the Ancient ones in anyway for their spiritual allegories. Though to be honest, the Gryphon definitely looks like a being that cannot exist.
The Gods and the Ancients used what existed, some Egyptian Gods are depicted with animal heads, all these animals exist.
The Gods and the wise Ancients wouldn't use something imaginary/made up in their allegory because what is true is always remembered throughout Ages, and what is made up simply fades away with time because it has no specific energies denoted to it. The image of a Dragon is enough to instill positive feelings in our hearts for these beings, this is the work of racial memory. We humans definitely had quite a positive relation with the Dragons[similar to that of Lions, Tigers, and Whales as well], especially the White race, almost every other child and most white adults love Dragons even though the Church says "dragon bad, muh jebus good". This is a sign of an ancient relationship with these beings which is deep within our racial memory[especially in White race], the Dragon continues to remind the White race of their Pagan past, this is also why Dragons are "evil" according to the christian church and most of the film industry. They are not "evil" solely for the Kundalini allegory. Dragons on a spiritual level, are and were above the present animal kingdom, it's why their energy still exists in our planetary system, and we still talk about them. They are still out there in the Astral from what I read here on the forums.
And it is not necessary that Dragons were as big as human villages. They could be of maximum size of an airbus a320 or an 18 wheeler, or minimum size to that of an American Bison.