Bob, do you know how bloody stupid people were back then? How much percentage of their brain they used?
They were basically open to hypnotic suggestion. Perhaps that is why they think they saw it?
There are many possiblities, I, however, do not believe magic is one of them.
What if I got a group together, say, 10, 000 men all saying that they have forseen this beast of the future as well. And say I got them to all say that I turned all Coke in all of the USA to Sprite.
How would you know that all the Coke just wasn't REPLACED with Sprite?
I'm willing to bet that if people did see the water go red, he just had someone in the Pharoah's pyramid replace it with blood, and they just spilled a bunch of water coloring or actual blood into a small part of the sea to give the reflection of water.
I remember way back before the white man killed off most the Native-Americans, they would sit by trees waiting for signs that they could break off a branch. Anything would do. Perhaps a bird landed on the tree, or a wolf walked by, or a cloud in the shape of the tree passed overhead.
One part of the ocean turning red, maybe all the people took it as a sign that all of it were?

Maybe tonight we'll fly so far away... We'll be lost before the dawn...