The live lobster near the beginning probably blew the budget. Later gargons are played by what looks like a black-painted vaguely lobster-shaped cardboard cutout. (They probably intended to do some process work to replace the silhouette with an actual lobster image, but didn't have the budget.)
On the other hand, when you consider the next-to-nothing budget the film had, you have to be impressed that the movie's non-special effects work. For example, the entire movie was shot wild track: every single sound was dubbed in later — and unlike certain other B-movies, you can't really tell.