The cephalopods are Cthulhu, or a related eldritch monstrosity.
Do we really know that T-Rex's scattered thought patterns are because of his general personality and not because of his subconscious's frantic attempts to get away from thinking about the monstrous, eldritch cephalopods and what they did to his mind? I assume that the comic is set in the time of the dinosaurs (because, you know, the main characters are dinosaurs)... and therefore R'lyeh might not have sunk yet. (I'm not sure what the raccoons signify, though. How about we just say Nyarlathotep did it