TigerTim saidI think it's nonsensical to look for literal truth in mythology. The prevalance of flood myths (and utopian societies in mythology!) suggests something quite fundamental about human psychology.
Certainly, the Minoans were greatly affected by the eruption of Thera [the popular explanation for the Atlantis myth], but I'm not at all certain that this explains it's power and persistence.
Actually, one huge flood has been proved, some 7500 years ago, when the mediteranean sea suddently invaded the black sea through bosphore, as sea level rised out of the end of last glaciation.
As a large part of the first civilisation lived on the shore of the sea, they had to flee and to settle elsewhere. It's the most up to date theory for flood myths in many civilisations, even if it doesn't explain the ones in native american or australian.http://en.wikipedia.org/wiki/Black_Sea_deluge_theory