QUESTION: How much can I change about a myth or mythic creature or monster? I’m using Navaho stories to create my creatures.
That’s a tricky question for an even trickier situation. If you are particularly referring to a legend or myth, you will annoy some readers if you stray too far. However, if you take that myth or legend and change it enough so that it's harder to tell what your original source is, you're less likely to get in trouble.
Using Navaho religion as a basis for your story is another kind of problem because the Navaho religion is still practiced so you're risking stomping all over someone's beliefs. You have to ask yourself how you'd feel if someone did the same thing with your beliefs.
Some famous authors have used their own version of a skinwalker story in their urban fantasy universes, but I've never heard of any backlash from this. However, Tony Hillerman got in trouble with some Indian groups for his mystery novels, and he was being respectful.
From my own experience, I don't like reading urban fantasy that plays fast and loose with Christian belief because I feel it insults so many people. Why insult many of your readers' beliefs?
I guess it comes down to how much flak you are willing to take by being slightly controversial.