In 'Skye - The Island and its Legends', Otta Swire has a lengthy account of the legend which states that this Dun is the source of the famous 'Fairy Cup' of Dunvegan Castle.
Condensed version -
A member of the Macleod clan, out at night searching for stray cattle, sees 'the door of Dun Osdale open and the Little People come out, a long train of them, and begin to dance on the green knoll near by'. He sneezes, and is dragged into the dun (abducted if you will!), by the fairies. Inside is lit by 'that strange green light associated with fairyland'. Although offered wine which forms part of the fairy banquet, in a beautiful cup, he knows better than to drink. His mother is a witch, and he knows that to eat or drink in the Dun will mean he's in the power of the Daoine Sithe. So he does the old tipping the drink inside his coat ruse, and once the fairies lose interest in him, makes his escape from the Dun with the cup.
Though chased by the fairies he makes it back home, where his mother puts a spell on him to protect him from the fairies. This spell has to be renewed every time he leaves the house. However, she forgets to put a spell on the cup.
The fairies put their own spell on the cup, which makes anyone who sees it or hears of it obsessed with aquiring it, even if they have to kill the owner. When, inevitably, the young man leaves the house without renewing his mother's spell, he is murdered for the cup by a friend.
On hearing of this, the chief of the Macleods orders the cup stealer hanged, and takes the cup into his possession, as the curse is now lifted. And to prove the story, the cup can still be seen at Dunvegan Castle.
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Easily accessible from the B884, just at the Uignish turn off. Easiest place to park is just down the turn off, then go through/over gate across B884. Excellent views across to Dunvegan. Not as well preserved as Dun Beag, but you can make out the double walls and what look like chambers within them.
Some indications of an enclosure behind the broch, but whether contemporary with it, I do not know.
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Although some references say that this site is hard to find/access, we had no problems. It is easily reachable from the parking place for the 'coral beaches'. Most visitors to Skye will go to these, and the site is worth the 1 mile or so detour.
The entrance is a bit intimidating, but once through, the tunnel opens out, and is crouching height (I'm 6' tall). Lined with stones, and extending some 10m, narrowing to the end, the structure is an engineering achievement.
This is the first souterrain I've visited, and I felt that the explanation of them as refuges from raiders seemed unliklely. You couldn't have a group of people sheltering here for more than an hour or two before it became uncomfortable to say the least.
In 'Places Of Power' Paul Devereux suggests that the Cornish Fogous may have had ritual functions, and one could certainly imagine, as one exits this site through the constricted opening, that it was used for ritual involving a second birth from the earth. More prosaically, having visited on a scorching June day, I wondered whether it was in fact some sort of early icehouse.
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