Considering that squid and fish are the only aquatic creatures that we've seen in Aegis, it would just make sense that a sea-faring cult might worship squid. There were all kinds of legendary sea monsters and whatnot in the lore of medieval/fantasy time periods. A giant kraken would fit right in, whether it actually became part of the official lore and was tied to Iblees, or whether it was just an island full of Lotus-Eaters that imagined the whole thing. No need to associate all of this with the works of Lovecraft, despite the tone of the initial post.
A unique departure into some newly developed lore would be nice, which seems to be the route he's going, but it's hard to find an animal that hasn't been worshipped or sacrificed by someone, somewhere.
Drowning sacrifices, armies marching into the sea, cities flooded, lots of righteousness. Just make sure you keep GMs in the loop and snip through the proper red tape.