The following is the story of the Krishna statue as told by Swami's longtime devotee, Mr. Ratanlal, to Joy Thomas, and printed in her book, "Life Is Awareness":

"It was in nineteen sixty-nine or seventy that Rajmata of Jamnagar invited Bhagwan to visit Jamnagar, to be a guest on the Rajmata's estate, and to visit the temple in that area. I was also invited to stay in Rajmata's house along with Bhagwan. Incidentally, Bhagwan's mother, Easwaramma, was there at that time. I had the good fortune by the Lord's Grace to sit in the car in which He Himself was riding.

"First, we were taken to see the Krishna temple. It had not been announced that Bhagwan was going, but how the word spreads! There was such a large number of people there that it was impossible to get near the statue of Krishna. So, we returned to the car and, as we were going to someone's house for lunch, I said, 'Bhagwan, we didn't even get to see the statue of Krishna because there was such a crowd.'

"He replied, 'Do you want to see it?'

"I answered, 'Bhagwan, I am very happy with our Sai Krishna,' that is, Himself.

"So, after we had our lunch and rested, we were returning to Janmagar. We crossed over a little hillock to find to our surprise that the sea was in front of us.

"Bhagwan asked that the car be stopped. We all got out. This was an absolutely unknown spot. Bhagwan asked if anyone had a camera, and it seemed that I was the only one who had. So I took a few pictures. Bhagwan lifted His robe and waded into the sea, and we all thoroughly enjoyed the outing and the beautiful scenery.

"After a while, Bhagwan sat down in the sand. He began to pull the sand toward Him and form a mound. He appeared to be drawing something in the sand on top of the mound He had made. Finally, He announced, 'Now, it is ready.' He pulled up the sleeve of His robe and put His arm down into the mound of loose sand. To the amazement of all of those present, He took from the sand a large, solid gold statue of Krishna. I prayed that I might take a picture and the permission was granted. This is the picture that I have given you. There was absolutely nothing there in the sand until He willed it to be there. His will is supreme."

Source: http://members.aol.com/introsai/miracles/krishna.htm

While returning to Jamnagar in the evening, Baba suddenly said, "O, the sea is here!" and the cars stopped. We came upon a wide patch of sandy shore, with a temple on a heap of rocks at one end. Baba walked along the watery edge and sat on the sands at last, as Krishna must have sat some fifty centuries ago.

He heaped the soft sand to the height of a cubit in front of him, putting us all into a state of extreme expectancy. He flattened the heap and, with his finger, drew a three-slanted line, a rough circle on top of it, a small triangle over that, and finally a short line across the circle. "It is ready," he said. Digging his hands deep into the pile, he drew forth a bright golden image of Lord Krishna playing the flute. "You did not get darshan of Krishna in the temple; have it now," he said.