The scene is well known. A Mighty Kraken ascends from the murky depths to do battle with a noble sailing vessel--a struggle of life and death! (Or, if this works better for you: it just wants to give the ship a hug--the murky depths are lonely, so we've heard). However you wish to frame the story, this pattern allows for a number of varied and fun colors and stitches. Use something near our example--or adapt it for your own favorites. (Add a Jolly Roger and do away with the "noble vessel" concept if the spirit moves you.)
This Kraken vs. Ship pattern is 11 pages long and includes details on colors and stitches used in the example embroidery. It also has two views of the pattern itself: the original direction and a reversed direction, making it easy to choose which way you want the design to be oriented regardless of which transfer method you prefer. Also included are instructions on all of the stitches used in the sample.
I make clothes for imaginary people during the day (in a professional theatrical costume shop), and make fairy doors, hellpuppy toys, and embroidery patterns by night.