Thanks to Draken and Bongo` I have some pictures.Yeah, it's a made-up stuff based on Medusa, as you see. Poseidon is Poseidon. But if the context of the game presumes you deal with actual gods and mythical creatures (I don't remember this game too well really), my guess is that they simply spelled Medusa in a wrong way. That thing often happens with Japanese.
Turns out Poseidon appears in this game, and there is a monster description for "Poseidon's retainer". I remember Medusa appearing in the enemy names, but there is no corresponding enemy I can find. The pallet swap for "Medeyun" is a "Death Mermaid".