OK, NSSD is a creation of persons unknown, promoted by bloggers such as Jay Cooney (see his blog Bizarre Zoology), and taking off in cryptozoology circles. Sea and lake creature aficionado Cooney (Jay Bizarrezoo Cooney on Facebook and elsewhere) is one of the enthusiasts who thinks our most enduring legend of the seas deserves a day, and it does. Whether one thinks the whole topic is, to quote Fred Flintstone, a "silly old myth," or whether you think there might still be something real behind the stories, the sea serpent has been with us from many centuries B.C. into the present day, with a major presence in toys, cartoons, terrible movies, and other areas of society. Some serpents, like Chessie and Caddy, have followings of their own. (Other nicknames for sea serpents off the U.S. coasts have included Slimy Slim and Colossal Claude.)
August 7 commemorates (if not precisely) two of the three most famous sightings in history, the third being the Nicoll/Meade-Waldo incident of December 7, 1907. In August of 1817, the first sightings of the Gloucester serpent were reported. He, she, they, or it appeared many times over that summer, with over a hundred witnesses. Even the usually conservative marine chronicler Richard Ellis wrote in his classic Monsters of the Sea that something unusual was apparently going on. The various conventional explanations (like the one in the article just linked to) don't really nail it for me, either. Read June O'Neill's terrific book The Great New England Sea Serpent for the best account of the whole business. There's a song, too!
On August 6 in 1848, the crew and captain of HMS Daedalus saw a huge serpentine animal and made a formal report. The Daedalus serpent may have been a giant squid behaving strangely, but the date is immortal in cryptozoology in any event.
Personally, I think it likely that, buried in a mound of data of varying reliability, there is still a very large eel or eel-shaped fish (like the frilled shark) at the bottom of this enduring legend. I have no hope for even cooler things, like surviving Mesozoic reptiles, but I'll take a 10m eel any day as a "sea serpent." Maybe I'm wrong, and there's nothing left except mistaken observations and the occasional hoax, but the sea serpent, animal or myth, will endure forever.
Want to know more? (and do you get that movie reference?) There are a number of good books. Ellis' is one: Bernard Heuvelmans' In the Wake of the Sea Serpent is THE classic. I spent several chapters on marine creatures in Shadows of Existence, and will treat them in more depth in my upcoming book Seas, Sharks, and Serpents.