The plan is to get one of those little clear plastic gumball containers, then maybe add some strands of fishing line around the outside. Then use clear Valejo water effects to bulk up the tentacles and body. Add a little white paint in the center and bulk up a central stalk that hides the brass rod holding it to the base.
I'll have to give it a try and see what happens!
So here is the start:
If this doesn't work out then my next idea is to simply check out the fishing lures (rubber worms, etc) at Wal-Mart and see what I might be able to make out of them.