La Laguna de los Xarayes
Early history of the Pantanal

The Pantanal captivated the interest of travelers from as early as the 1500s, when the first Spanish explorers, Martínez de Irala and Nuñez Cabeza de Vaca, arrived in the midst of the rainy season, traveling by boat up the Paraguay River. Writing of the vast expanses of water they encountered, people soon began to believe in the existence of a vast inland sea, which was called the Laguna de los Xarayes. The Laguna de los Xarayes was thought to be the gateway to the Amazon and a portal to the legendary city of gold, El Dorado.

In the 1600s, European cartographers began placing this "Laguna" on their maps, and soon began incorporating within the lake a large island, known as La Isla de los Orejones. This island was told to contain an abundance of fruits such as olives, grapes and pears (ah yes, the most traditional of South American crops) and inhabited by good-natured native people who possessed gold, strange ear piercings and friendly hearts for living in this land of plenty. It was also known as the "Island of Paradise".

It was in the mid-1700s that this myth was put to rest, when Portuguese explorers ventured west of the demarcation line of the Treaty of Tordesillas, trying to gain more territory for Portugal. When they came to the region of the Pantanal, they discovered no island, and for that matter, no vast inland sea. It was a while longer before people realized that the Paraguay River did not connect with the Amazon basin.

Historical map of central South America. The Laguna de los Xarayes is located in the center and connects to the rivers of Northern Brazil.

See: http://www.geographicus.com/blog/rare-and-antique-maps/laguna-delos-xarayes/ 
and http://es.wikipedia.org/wiki/Pantanal#Historia (español)

-Palani