According to Skanda Purana, Lord Jagannath (Vishnu) was first worshipped as Neela Madhav in an idol form in the Purusottama Kshetra before the installation of the wooden deities of Lord Jagannath, Balabhadra, Subhadra and Sudarshan by King Indradyumna.
The centre of this Purusottama Kshetra was a blue mountain which was surrounded by deep jungles from all sides. The area of this Kshetra stretched five “Kroshas” (1 Krosha=2 miles) into the great sea and two Kroshas into the sea coast. It was situated on the coast of the great ocean (Tirtharaja) and surrounded by the golden sands from all sides.
There was a very high tree (Kalpa Vata) at the top of the blue mountain which retains its physical form even at the time of Pralaya (Dissolution of the Universe). Its length was 1 Krosha. It was full of tender leaves but devoid of any fruits or flowers. There was no change in its big shadow even after the sunset.
In its western side there was a beautiful tank known as “Rouhina Kunda” which contained holy water in it. The tank had stairs going down inside it which were made from blue stones. Outside the tank there were four altars situated in its four directions and were made from crystals (Sphatik).
The eastern altar at its centre contained an idol of Neela Madhav (Vishnu) made from blue sapphire. That place remained always cool due to the presence of the shadow of the Kalpa Vata.
The idol of the Lord was eighty one fingers high and was placed on a golden lotus. The lips of the idol radiated a divine smile that was so beautiful that even the brilliance of full moon looked pale in comparison to it.
The ear rings of the Lord were shaped like “Makara” (Crocodile like creature). The Lord’s neck was decorated with beautiful necklaces. The idol of Neela Madhav looked so beautiful that it seemed it would be a challenging task for even Vishwakarma (God of Architecture) to carve an idol like it.
The idol had broad shoulders and four hands. On its chest the Lord wore the divine “Kaustubha Mani” (a Jewel). The reflections on the jewel looked enchanting and created an illusion of containing the fourteen heavens inside it. The idol wore pearl necklaces that extended up to the waist.
It had a deep navel. It wore yellow dresses. The two thighs of the Lord looked like two pillars. The feet were round and very beautiful. The idol was decorated with bangles, arm bands and a head gear.
In His four hands the Lord held Shankha (Conch), Chakra (Discus), Gada (Mace) and Padma (Lotus). At the left side of the Lord, Goddess Lakshmi (His consort) was playing Veena (a musical instrument). She was decorated with precious jewelry and was looking at the Lord.
Behind them Lord Sheshnag stood covering their heads with his umbrella like hoods. In front of them Lord Sudarshan was standing in his divine form. Behind Lord Sudarshan, Lord Garuda stood with folded hands.
The idol of Neela Madhav along with Goddess Lakshmi was worshipped by Gods like Brahma, Rudra and Indra. Anybody who had a glimpse of the idol, attained salvation instantly.
Once a pilgrim told King Indradyumna about Lord Neela Madhav and the glory of Purusottama Kshetra. After listening to him the King became interested to visit the Kshetra and have a glimpse of Lord Neela Madhav.
This ultimately led to a series of events that resulted in the disappearance of the idol of Neela Madhav and appearance of a sacred wood from which the deities Lord Jagannath, Balabhadra, Subhadra and Sudarshan were carved out and installed in the Sri Mandir by the King himself.