Just did a quick Google for existing myths. I don't think either of them explain the Garhound the way you're after, but they may be a starting point.
http://www.geocities.com/TimesSquare/Realm/5545/mything/garhound.html
There was a bit about the derivation of the word at
http://people.cornell.edu/pages/bjm10/garhound.html
but that's now gone. Google cache at:
http://www.google.co.uk/search?q=cache:i_IzFBfEFdwC:people.cornell.edu/pages/bjm10/garhound.html+garhound&hl=en&ie=UTF-8
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