From Fox News:
Speaking at a press conference early Thursday morning, New Zealand researcher Neil Gemmell gave his "plausible" explanation for what people may have seen in the past, but added that it is most certainly not a dinosaur.
"There is a very significant amount of eel DNA," Gemmell, a geneticist from New Zealand's University of Otago, added. "Eels are very plentiful in Loch Ness, with eel DNA found at pretty much every location sampled – there are a lot of them. So, are they giant eels? Well, our data doesn't reveal their size, but the sheer quantity of the material says that we can't discount the possibility that there may be giant eels in Loch Ness."
The legend of the Loch Ness monster has commonly been attributed to a plesiosaur that somehow managed to survive the mass extinction event that killed off the dinosaurs.
Personally I never quite believed the plesiosaur theory but this new eel one seems highly likely. People think they see lots of things when they're "on edge" (rewind to 8 year old...or 25 year old Mary thinking a pile of clothes looks like a ghost in the corner of her room) so it's very possible that someone just saw a big ass eel one day and the rest was history.