William Gilly has seen a Kraken. The mythical squid beast with ship-dooming tentacles surely exists, Gilly says, because he's seen a baby one. "It was this big around," he says, making a circle as big as a tire with his arms, a proud, boyish smile on his face. Fishermen spotted the carcass of the 2.4-metre-long, 181-kilogram baby giant squid in Monterey Bay three years ago, according to Gilly.

"If you're an assistant professor proposing to study it, I don't think you'd get tenure," he says. "But one has to exist."

Gilly's laboratory at Stanford University's Hopkins Marine Station in Pacific Grove brims with squid décor: stuffed animals, preserved specimens, glass figurines, drawings, photographs, plastic toys, and piñatas. He has studied these denizens of the sea for almost four decades, and he's handled countless numbers of the fabled Kraken's smaller cousins, the very real jumbo Humboldt squid. Like their giant counterparts, Humboldt squid are enigmatic. No one has seen them mate or lay eggs. No one has watched them develop from egg to adult. No one knows how many exist.

These tentacled titans have now ensnared marine biologists with another riddle: they have left their normal gathering grounds in the Sea of Cortez in Baja California, Mexico. Fishermen worry that a critical part of their livelihood may be gone. Many families have depended on Humboldt squid since the slippery creatures moved in droves into the Gulf of California's Guaymas Basin in the 1970s.

"We have a huge problem on our hands," says coordinator Juan Pedro Vela Arreola of the Alianza de Ribereños y Armadores, an association of fishermen and producers in Mexico. "Fishermen are desperate."

Gilly blames the most recent El Niño in the Pacific Ocean for forcing some Humboldt squid to migrate away. Others have physically shrunk -- just one bizarre adaptation among their many strange body-shifting traits. Leaders of Mexican fisheries and scientists are banding together to figure out whether the diablos rojos (red devils) will come back, and how to cope in the meantime.

"You have to learn to live in a very unpredictable way," says marine biologist  Unai Markaida  of El Colegio de la Frontera Sur (ECOSUR) in Campeche, Mexico. "You live like a squid, and you adapt to the life it leads."

Seeking cephalopods
"They're very mysterious," says marine biologist Danna Staaf, stressing very in a slightly higher pitch. "And so weird." 

Staaf, a self-described "cephalopodiatrist," completed her PhD with Gilly's team. She studied Humboldt squid on two summer research cruises in the Gulf of California before the latest El Niño drove them away. She and her crewmates pulled up to 15 squid out of the water every night, when they would come up to the surface from depths of more than 975 metres to feed. Many of the 9-kilogram cephalopods she caught were about 1.2 metres long. Most were a year old. Scientists can tell their age by looking at the number of rings on tiny crystals located near their brain called statoliths, like botanists can age a tree by counting its rings. These stones help a squid detect gravity and maintain their balance and sense of space.

The scientists stored some of the catch in their "squid condo," an oversize cooler with continuously flowing water and six clear, plastic tubes. They housed squid in separate tubes to keep them from attacking one another. Over the next few days, they studied the squids' behaviours and neurophysiology. For instance, altering the temperature and oxygen content of the water could trigger or change their escape response -- the way squid dart away when startled by a predator.

Staaf dissected other squid to study their development, the focus of her dissertation. She used their eggs and sperm to make squid babies. She wanted to discover the temperature range at which their eggs could hatch and develop. At the time, Humboldt squid had spread to waters off the coast of Monterey. Marine scientists thought the squid might establish new colonies there, but Staaf wanted to know whether it was even possible for the animals to grow in the much cooler waters of California's Pacific coast. In the lab, she found, their eggs can grow between temperatures of 15 and 25 degrees Celsius, suggesting it is possible they could set up a breeding population. Whether squid babies have the same preferences in the wild is still unknown, Staaf says.

Other team members studied squid chromatophores, structures in their muscles that allow them to change colour. Humboldts sometimes flash from red to white as they propel themselves through dark waters. Scientists don't know how they control these colour shifts, whether it's the brain or local nerve cells that set off the flickering. They also don't fully understand why they suddenly change colours, but some speculate it's a form of communication.

When they're not in direct contact with other squid, their flesh flickers from red to white in a random, mosaic-like pattern. Gilly compares this to visual white noise. But as they interact with their species, the irregular colour waves become more organised, like a cephalopod Morse code, Gilly says. They can change the intensity of the flashing, as well as the rhythm and frequency. Squid might use these "calls," together with arm posturing, to attract mates or to establish hierarchies, for example.

Gilly and his team have seen some of these behaviours through underwater "Crittercams," about the size of 340-gram drink bottle, attached to a squid's back. "Ideally, we'd also like to see what they eat," Gilly says, because that might help his team study these animals. Scientists can't get Humboldts to eat in the lab, so squid last only a few days in captivity.

Indeed, squid dislike being trapped, strongly. Sometimes they get so anxious, they ram themselves against the tank. "They've never seen the bottom. They've certainly never seen the wall of a tank," Gilly says. "They're intelligent organisms. And when you put one in an abnormal situation, they get totally freaked out. They don't do their flickering in the lab," he notes.

Scientists do know that during the day, Humboldt squid forage for silvery lanternfish and other small animals in the oxygen minimum zone, a dark, cold netherworld more than 900 metres deep. Here, oxygen is scarce, and while few animals can withstand its hostile environment, Humboldts seem to thrive. "Living in low oxygen -- that's surprising, especially for an animal that's an athlete," Markaida says. How they move and how their nervous system functions under these conditions is still a mystery.

Widespread changes in the temperatures of Earth's oceans have compelled many creatures, including the powerful Humboldt squid, to seek new climes. Their dominion usually stretches from Argentina to California, but more recently they've been spotted in Canada and Alaska. Scientists don't yet understand how the squid are settling into their new hangouts. This month, a few Humboldts stranded themselves on the beaches of Pacific Grove, Calif, while whale-watching boats have spotted them near Point Pinos. These sightings might be a sign they are returning, Gilly says.

Latest on wired.co.uk