|Read about the knit pug here.|
I used this Octopus pattern by Hansi Singh via Ravelry. It is a great pattern, with detailed pictures to supplement the instructions. It is worth the $6. Instead of worsted weight yarn, I used sport / 5 ply yarn - specifically Kambgarn in rosebloom and glacier green - with size US2 double pointed needles. This way, the octopus came out a little smaller and more delicate. The only downside was I was unable to double up the pipe-cleaners which fill the legs, making it less moveable.
I am planning to attach the octopus to a large tea cosy I am knitting; something I first saw on Ravelry. I'm not sure it will work out exactly as I envision it, but I'm optimistic!