Not to spoil too much, but the game does involve battling numerous gods (What a shock with a title like G.O.D.). Some of the enemy names throughout the game are written properly in Japanese, while others are modified slightly (usually to create a pun). As far as this particular enemy is concerned, I suppose we have 3 options:
1. exact phonetics: Medyun, Medune, Medyune
2. likely origin: Medusa
3. pun: Madusa, Merdusa
I'm leaning more towards #3. It may sound kind of lame, but the game uses these kinds of puns throughout.
@Filler: Medusa is the original way this was translated in the monster list.