A team of paleontologists found the remains of a giant fossil frog that lived some 70 Million years ago in Madagascar, off the eastern coast of Southern Africa during the Age of the dinosaurs, the Beelzebufo ampigna.
This giant frog measured about 41 cm long and weighed 4.5 kg (16 in and 10 lbs). It had a thick skin and sharp teeth.
The team that found it, led by David Krause of Stony Brook University named it "the frog from hell" hence its name, Beelzebufo (devil = Beelzebub and toad (in Latin) = bufo).
It was probably the largest frog that ever existed and was more than twice the size of its closest relative, the South American Ceratophrys aurita and nearly five times larger than the biggest extant frog on Madagascar, the Mantidactylus guttulatus.
The interesting thing is the "South American Link", it seems that Beelzebufo is quite similar to the South American Ceratophryinae, and, on the other hand quite unlike the local Madagascar frogs. If it was similar to its American relatives, it would be a predator gobbling up everything that it came across (small mammals, other frogs and even small newborn dinos).
These Ceratophryinae ,or "horned frogs", are a subfamily of the leptodactylid frogs. And they are only found in South America.
Also in South America, another interesting frog can be found; it lives in Chile and is known as the "helmeted water toad" or "giant Chilean toad", (Calyptocephalella gayi, formerly Caudiverbera caudiverbera).
It is found in the temperate and cold areas from Central Chile to northern Chilean Patagonia, from Coqimbo to Los Lagos, it is a big frog and can reach up to 32 cm (11.9 in.) from snout to vent  and weigh 3 kg (6.6 lbs.) . As it is the only extant member of its genus, it is sad news that it is endangered by exotic frogs and fungal infections. 
Frogs and lake monsters
So, why frogs? Well, I read a comment at a post on lake monsters in Southern Chile that offers an interesting explanation on the possible animal behind the sightings, below I quote the relevant text :
I looked into some stories and diaries of old Chilean families. And it is so, that in one, whose surname I will not disclose, that tells how a hose was devoured by an immense toad. I knew that the caudiverbera frog has a very strange gene that expresses itself once every ten thousand millions to produce a frog of one meter [3.3 ft.] [long] It is a recessive gene. I knew then that another recessive gene produced yet an even bigger frog when it is phenotypically expressed. I believe that this solved the case of the vilú the immense killer toad of the great irrigation channels and lagoons. 
The idea is intriguing, the helmeted frog does live in the cold waters of the Patagonian Lakes all the way Reloncavi area. So they are in the right location. The "recessive gene" is something that should be investigated. I have not yet found any papers about this mysterious gene or its "phenotypic expression". However, the Madagascar remains prove that frogs can grow to a big size, alas, as far as the fossils found to date show, not big enough to eat a horse in one mouthful.
Nevertheless, the diary entry (if true and not just some yarn made up by someone)with the horse eating frog is indeed interesting. It is a pity that the date and site of this incident are not given.
Myths and frogs
What did the natives have to say about frogs? Did they believe in giant toads?
We have the Arumco is a myth about a giant Mapuche frog, whose name derives from "arun" = "big frog" and "có = water. 
The name and supernatural nature of Arumco were recorded by Naturalist Juan Ignacio Molina, who mentioned it in his book (1788) on Chile's natural history: " aquatic frogs, the Arunco [...] that the Araucano [Mapuche] call Genco which means father of the water because they believe that they contribute to keeping and to the health of the waters. 
Then there is the Mapuche's "piwichen" myth, a flying feathered snake, which, in some versions, according to Vicuña Cifuentes, is a snake that mutates into a gigantic frog covered with fine hair which then sprouts wings (more info on this hairy frog). The winged frog was depicted by Renaissance artist Hieronymus Bosch in his "The Temptation of St. Anthony", which shows that the range of the human mind, when it comes to weird creatures, is quite limited.
And last but not least is the Matuasto, depicted below in a photograph that I took at the UNESCO World Heritage Site of Cueva de Las Manos, Santa Cruz province, Argentina:
These creatures are said to be tailless lizards (whatever that may be) or a variety of short tailed lizard. In my opinion, they look quite frog-like and may depict some variety of monster-toad. They were drawn in red paint on the walls of Cueva de las Manos ledge some 8 to 10 thousand years ago by the Tehuelche Indian's ancestors.
It was a persistent myth, because, the creature was mentioned by British explorer George Musters who in 1870, after traveling from Punta Arenas to Carmen de Patagones with a band of Tehuelche, wrote:
Another animal supposed to be possessed of magical powers is a flat toad-like lizard, which is believed to lame horses by mysterious agency, and is killed whenever met with. 
The word Matuasto is imported, exotic, of Quechua origin (from the Bolivian and Peruvian Andes Region),  so it can not be a local myth, perhaps it was introduced from Chile by the Mapuche (who acquired it from the Inca invaders ca. 1430) who in turn passed it on to the Tehuelche. Fear of Matuastos prevails in the area that came into contact with the Incas, such as Northern Argentina.
This site (SIB.gov.ar) has some details and an image of a matuasto.
 Ned Stafford . Giant frog found in Madagascar. 'Frog from hell' fossil hints at later split of continents. Nature. Online. 18.02.2008. doi:10.1038/news.2008.607
 Molina, Juan Ignacio, (1788). Compendio de la historia geografica, natural y civil del Reyno de Chile. Madrid: Sancha, pp. 238
 Veloso, A. & Formas, R., ( 2004). Caudiverbera caudiverbera. 2006 IUCN Red List of Threatened Species.
 Naish, Darren (2007). It's the Helmeted water toad! 27.10.07.
 Andrés El monstruo del lago generla Carrera, Comments. 23.10.10
 José María Alfonso Félix Gallardo, (1994). Anfibios y reptiles: relatos y leyendas, etimología, usos y abusos. Librería Agropecuaria, pp. 33.
 Musters George Chaworth, (1969). At home with the Patagonians: a year's wanderings over untrodden ground from the Straits of Magellan to the Rio Negro. (1869).Greenwood Press, pp. 182.
 Fernando Hugo Casullo, (1963). Voces indígenas en el idioma español. Cia. Argentina de Editores, pp. 34
Patagonian Monsters - Cryptozoology, Myths & legends in Patagonia2010 International Year of Biodiversity Copyright 2009-2010 by Austin Whittall ©