Fabulous creature still found on island (4)
I believe the answer is:
yeti
'fabulous creature' is the definition.
(I've seen this in another clue)
'still found on island' is the wordplay.
'still' becomes 'yet' (yet can mean still or so far).
'found on' says to put letters next to each other.
'island' becomes 'i' (geographical abbreviation).
'yet'+'i'='YETI'
(Other definitions for yeti that I've seen before include "mythical monster!" , "Mythical humanoid" , "folk regard it as a creature of legend" , "A legendary animal" , "Legendary Himalayan dweller" .)